Dollar falls as U.S

The dollar was pushed lower by news of dismal U.S. job creation, with the unemployment rate jumping by its largest amount in 22 years.

5.5 percent from the 5.0 percent reported in April, sharply higher than the 5.1 percent rate expected by economists polled by Thomson Reuters IFR Markets, when it also rose 0.5 percentage points. The economy lost 49,000 jobs in May, a smaller loss than 60,000 decline expected from the payroll survey, but markets focused on the unemployment rate by selling off the greenback.

He said markets were looking for a reason to sell the dollar against the euro, which has been buoyed by hawkish inflation talk from the European Central Bank. Some analysts said the underlying payrolls number is somewhat encouraging, as it shows the loss of jobs may be stabilising somewhat, whereas the unemployment rate is a lagging indicator.

The economy remains very weak and enjoys little forward momentum, meaning the dollar will hardly be rallying strongly any time soon.