The dollar and yen tumbled on Friday after a report showing the US economy added the most jobs in five months in July dampened demand for traditional safe-haven currencies. The euro headed for its best one-day rise in a month against the dollar. Its rally began before the jobs data as investors took a more optimistic view of Thursday's European Central Bank meeting, which signalled further support for debt-stricken Spain and Italy.
The dollar index, which tracks the greenback versus six other major currencies, fell 1.2 percent to 82.324, on pace for its biggest daily drop since the end of June. The dollar gained 0.5 percent against the yen, to 78.58 yen, after hitting a two-week high of 78.77. The Japanese currency fell sharply across the board, losing more than 1 percent against the Australian, Canadian and New Zealand dollars. It lost more than 2 percent versus the Mexican peso and fell 2.6 percent against the South African rand. The euro rose as high as $1.2386 on Reuters data and was last up 1.7 percent at $1.2385, on track for its best day since the end of June. Against the yen it rallied 2.1 percent, to 97.40 yen.