Dollar gains pared by weak employment report

NEW YORK, Sept 6 (AFP) The dollar's rally was slowed yesterday by worse-than-expected US unemployment figures but held modest gains as worries about the eurozone economy dominated sentiment. brAt 2100 GMT, the euro was quoted at 1.4260 dollars compared to 1.4321 dollars in New York late Thursday. brAgainst the Japanese currency, the dollar was at 107.67 yen from 107.10 yen Thursday. brIn late New York trade, the dollar stood at 1.1186 Swiss francs from 1.1087 Thursday. brThe pound was at 1.7653 dollars after 1.7681. brThe dollar managed to keep on track even after a Labor Department report-considered one of the best indicators of economic momentum-showed US unemployment jumped to a five-year high of 6.1 per cent as 84,000 jobs were slashed in August. brThe dollar appears well-positioned to benefit from the misfortunes of other major currencies going forward, said Samarjit Shankar at Bank of New York Mellon. brIn other words, even though the economic backdrop in the US is not exactly rosy, the eurozone and Japan appear to be in a relatively worse situation with deteriorating activity and sentiment indicators. China and India are beginning to show signs of growth moderation as well. brThe euro fell to below 1.42 dollars, its lowest level since last October, after German industrial production figures for July that raised fears the biggest European economy was in recession. brThe US currency has surged against the euro this week. The euro started off Monday above 1.47 dollars. brSome analysts have begun suggesting the dollar's rally might be short- lived. brThe euro was hit by the poor economic data out of Germany. The nation's industrial output slumped by 1.8 per cent in July from June, more than three times the downturn analysts had expected, official figures showed Friday. brThe dollar had already been supported Thursday by a survey from the Institute for Supply Management that showed a rise in service sector activity in the United States, dealers said. brOn Thursday the European Central Bank also decided to keep its key lending rate unchanged at 4.25 per cent. The Bank of England meanwhile held British borrowing costs at 5.00 per cent the same day. brThe decisions were widely expected, but comments by ECB president Jean-Claude Trichet moved the market afterward.