* U.S. non-farm payrolls worse than expected in June
* Private payrolls rise less-than-expected
* Unemployment rate falls
* Aussie gains after mining tax bill diluted
(Updates prices, adds details, changes byline)
By Wanfeng Zhou
NEW YORK, July 2 (Reuters) - The U.S. dollar slipped
against the euro on Friday, extending the previous day's steep
losses on concerns over the U.S. economic recovery after
disappointing U.S. jobs data.
U.S. private payrolls rose less than expected in June and
overall employment fell for the first time this year as
thousands of temporary Census jobs ended, indicating the
economic recovery is failing to gain traction. For more
details, click [].
The euro rallied sharply against the dollar this week as
investors looked past economic problems in the euro zone and
instead focused on the possibility of a stalled economic
recovery in the United States.
The jobs report "reinforces the market's view that the U.S.
recovery is losing steam," said Greg Salvaggio, vice president
of trading at Tempus Consulting in Washington.
"There's a growing concern in the marketplace right now
that previously the U.S. was thought to be the economy which
was going to drive forward, regardless of events happening
elsewhere in the world," Salvaggio added. "Now there are some
very, very serious concerns that the U.S. recovery is beginning
to stumble."
Friday's U.S. jobs report follows weak housing and
manufacturing data, and a rise in initial jobless claims on
Thursday and weak consumer confidence data earlier in the
week.
In afternoon trading, the euro was at $1.2541 <EUR=>, up
0.2 percent on the day. The single currency rose as high as
$1.2613 -- the first time over the 1.2600 level since May 21.
"We are at a phase at the moment when the dollar reacts
negatively to poor U.S. data, which we have quite a lot of
recently," said Tom Levinson, currency strategist at ING in
London.
The euro had already gained momentum as concerns eased
about euro-zone liquidity problems after a lower take-up of
European Central Bank funding and successful bond auctions on
Thursday.
On Thursday, the euro surged more than 2.0 percent in its
biggest one-day advance since mid-March last year. However,
some analysts remained cautious about the single currency ahead
of European bank stress test results and a Greek T-bill issue
due later this month.
Strategists at Citigroup said a close above $1.2490 in
euro/dollar on Friday will "complete the bullish outside week"
and a close above the 55-day moving average at 1.2550 will
"confirm the bullish break."
"If achieved, these patterns would strongly suggest that
the next significant directional move in euro/dollar will be up
to $1.31," they wrote in a note.
MINING TAX
The Australian dollar <AUD=> rose for the second straight
day, climbing as high as $0.8510, before giving up gains to
last trade at US$0.8419, down 0.1 percent after the Australian
government agreed to a watered-down version of a proposed
mining tax, easing concerns the tax would hurt business
investment. []
"The Australian dollar was buoyed by a mining tax deal
reached in that country," said TJ Marta, chief market
strategist at Marta on the Markets, in Scotch Plains, New
Jersey.
The dollar was last at 87.66 yen <JPY=>, up 0.1 percent.
On Thursday, the greenback hit a seven-month low against
the yen <JPY=>. Japanese exporter offers were likely to emerge
in the low 88-yen range, a dealer at a Japanese bank said.
One-month implied volatility for dollar/yen pulled back to
around 12.2 percent <JPYVOL> from around 14 percent on
Thursday.
Option triggers were seen below 85 yen, traders said.
The dollar fell for the fourth straight week against the
yen, losing an additional 1.8 percent and bringing the total
loss over the four weeks to 4.6 percent.
For the week, the euro gained 1.4 percent against the
dollar, reversing a loss from the previous week.
(Additional reporting by Nick Olivari)
(Editing by Theodore d'Afflisio)
