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The dollar eked out a gain against most major currencies other than the yen after the government said the unemployment rate rose to 10.2 percent, the highest since April 1983.
Concerns about the recovery in the world's largest economy typically send investors into the relative safe haven of U.S. government debt on the assumption U.S. taxpayers will always repay it.
That stokes demand for the dollars to buy that debt. The continued negative trends in the U.S. employment data will keep pressure on the dollar. That pressure will likely continue until there is improvement on the road to recovery.
"A bad number and the dollar shows some strength next week," said Dan Cook, senior market analyst at IG Markets in Chicago.
Analysts cautioned that the effect of the jobs data will fade as the week moves closer to the most significant data of the week, the Reuters/University of Michigan preliminary November consumer sentiment survey on Friday.
"Traders will soon revert to the traditional view of employment as a lagging indicator and most other numbers are recovering," said Joseph Trevisani, senior market analyst at FX Solutions in Saddle River, New Jersey. "The overall picture is still recovering mildly and that economic sentiment should reassert by the latest Wednesday, and probably sooner."
If investors return to the belief the U.S. and global economies are recovering, they will swing back to increased risk tolerance, raising demand for higher-yielding assets and the currencies to buy them at the expense of the greenback.
For the week, the euro [EUR=
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] rose 0.9 percent against the dollar, despite a 0.2 percent drop on Friday. The dollar rose 0.2 percent against the yen [JPY=
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], although most of the week's gains were lost Friday in a 1 percent decline after the jobs number.
The dollar index, a measure of the dollar against a basket of six currencies, fell 0.7 percent for the week.
Data Calendar
Other than the hangover from U.S non-farm payrolls, investors will be looking for factors other than data to explain foreign exchange market moves in the early part of the coming week, with a relatively light U.S. economic calendar ahead.
Thursday will bring the release of weekly initial jobless claims, closely scrutinized in recent months for clues on the strength of the U.S. economic recovery.
The Federal Budget for October will be released the same day, with expectations for a $155 billion deficit.
Friday marks the heaviest day of the week, with October import and export prices, September international trade and the preliminary reading of the Reuters/University of Michigan preliminary November consumer sentiment survey.
October import prices are expected to rise 1.0 percent and export prices to rise 0.2 percent.
September international trade data is expected to show a $31.5 billion deficit.
The Reuters/University of Michigan preliminary sentiment survey is forecast at 71.0, up from 70.6 in the final reading for October.
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Data is a real-time snapshot *Data is delayed at least 15 minutes