The dollar fell against several key currencies Friday after a dismal U.S. jobs report triggered fears that the economy could slide back into recession.
The Labor Department said U.S. employers added no workers in August, while the unemployment rate remained at 9.1 percent. It was the weakest jobs report since September 2010.
Even if the U.S. economy doesn't start shrinking, growth will be very slow, said economist Paul Ashworth of research firm Capital Economics. The White House on Thursday predicted that unemployment would stay around 9 percent in 2012, while the economy would grow at only a modest 2.6 percent pace.
The weak jobs report has increased chances that the Federal Reserve will announce at its September meeting that it will start buying bonds to support the economy, said Kathy Lien of GFT brokerage.
Buying bonds could drive interest rates lower, promoting borrowing and spending. Lower rates also tend to weigh on a currency because investors seek bigger returns elsewhere.
In late trading in New York, the dollar slipped to 76.72 Japanese yen from 76.78 yen, and dropped to 0.7884 Swiss franc from 0.7942. The yen and franc, along with gold, have become the favored bets for traders seeking to park their funds in a safe place.
The dollar, which gives access to the U.S. Treasury, stock and corporate bond markets, is also a traditional safe-haven currency. Some of its luster has faded since Standard & Poor's downgraded the U.S. debt rating, and because of worries about weak growth and Fed policies that devalue the dollar.
The central banks of Switzerland and Japan both tried in August to rein in the run-up in their currencies. The dollar hit a post-World War II low versus the yen last month, and a record low against the franc. The euro was also approaching parity with the franc as worries persist about the European debt crisis.
The British pound rose to $1.6209 from $1.6178.
The euro dropped to $1.4187 from $1.4273 because of renewed concerns about Greece's ability to meet the budget requirements of international lenders as its economy worsens. Fears of a Greek default earlier this summer, in part because lenders threatened to withhold aid until the Greek government made more cuts, set off a wave of fear that threatened to drag Europe's core economies _ including Italy and Spain _ into the debt crisis.
European leaders have worked to revamp the rescue fund for the continent's most troubled countries, including Greece, but individual euro countries have not yet approved the deal.
Fears about the European debt crisis grew after international debt inspectors abruptly left Greece Friday because of disagreements over deficit levels and strategies for overcoming a budget shortfall. They are supposed to start talking again in mid-September.
The dollar rose to 98.44 Canadian cents from 97.55 cents.