The US dollar is mostly higher despite bad news about US jobs. Grim outlooks on the European economies and oil's continued drop supported the greenback.

The 15-nation euro fell to $US1.4243 in late New York trading from $US1.4331 late yesterday. Earlier, in European trading, the euro touched as low as $US1.4914, a level unseen since October last year.

The dollar has gained more than 4 cents against the euro this week, or 3%. That's the biggest weekly gain this year, according to Thomson Reuters.

The British pound fell to $US1.7634 from $US1.7690. The pound earlier hit a fresh 28-month low at $US1.7534.

The Labor Department reported today the unemployment rate climbed to 6.1% in August on top of 84,000 job cuts, from 5.7% in July. The rate is now at a five-year high. Consensus estimates had been for payroll losses of about 75,000 and a jobless rate of 5.8%.

Rising unemployment may mean the Federal Reserve will be reluctant to increase interest rates, which can benefit a currency and rein in inflation but slow the economy.

The European Central Bank and the Bank of England left their benchmark interest rates steady yesterday, at 4.25% and 5% respectively.

ECB president Jean Claude Trichet, in his remarks, revised 2008 and 2009 euro zone GDP growth to somewhat lower than the bank had predicted in June.

"We do not expect prolonged dollar damage from the gloomy (unemployment) report mainly because the recent dollar strength is not a result of improved US fundamentals, but of worsening conditions abroad,'' wrote Ashraf Laidi, chief FX strategist at CMC Markets US in New York.

The dollar also got a bump from oil's drop today. Crude prices for October delivery fell as low as $US105.13 before settling at $US106.23 a barrel on the Nymex, its lowest settlement since early April.

In other trading, the dollar rose to 107.13 Japanese yen from 107.04 yen last night. The buck edged up to 1.1168 Swiss francs from 1.1088 francs, and slipped to 1.0643 Canadian dollars from $C1.0673.

Gold for current delivery closed at $US797.60 per troy ounce on the New York Mercantile Exchange, down from $US797.90 late yesterday.

AP