NEW YORK - The dollar pulled back from a one-week high against a basket of major currencies on Friday after a dismal December U.S. payrolls report highlighted the need for further stimulus measures to prop up an economy battered by the coronavirus and its related government lockdown measures.

The Labor Department said nonfarm payrolls decreased by 140,000 in December, the first decline in eight months, well below expectations that called for a still-weak increase of 71,000 jobs. The unemployment rate was 6.7%. Economic data during the week leading up to Friday's report indicated a stalling labor market. 

The greenback had been climbing from a nearly three-year low on Thursday and reached a high of 90.132 on Friday ahead of the data, its highest level since Jan. 1, as a rise in U.S. yields helped fuel the unwinding of bearish bets on the currency, with traders taking profits against the euro in particular.

Still, the pullback was somewhat muted as investors expect additional stimulus measures to help buttress the economy until vaccine rollouts allow for the easing of lockdown measures.

"We have weaker-than-expected non-farm payrolls on the surface here, but not truly shocking considering the unexpected miss, job loss recorded ... on Wednesday," said Erik Bregar, head of FX strategy at Exchange Bank Of Canada, Toronto.

"Hence, we saw the very tepid knee-jerk bid for the broader U.S. dollar, then sell-off. The much better-than-expected wage growth, which nobody was expecting, also takes some of the sting out of the headline job loss."

The dollar index last rose 0.043% at 89.84.

Democrats won effective control of the Senate this week, while chaos gripped Washington. Congressional Democrats on Friday weighed impeaching President Donald Trump for a second time after his false claims of election fraud helped encourage a mob that stormed the U.S. Capitol.

The Democrats' Senate seat wins give President-elect Joe Biden latitude to push through more spending, which some analysts predict will fuel risk appetite and be negative for bonds and the dollar, although a strongly bearish consensus outlook for the greenback at the end of 2020 has eased somewhat. 

The dollar index dropped 7% in 2020 and as much as 0.9% in the first few days of the new year on expectations of U.S. fiscal stimulus. But since hitting its lowest level since March 2018, the greenback has found some footing, climbing as much as 1%.

Both the euro and the pound strengthened against the dollar in the wake of the payrolls report. The euro was last down 0.14% to $1.2253 while Sterling was last trading at $1.3588, up 0.18% on the day.

Bitcoin hit a fresh all-time high of $41,802.84, and last rose 4.32% to $41,217.91, after smashing through $40,000 for the first time on Thursday. 

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Currency bid prices at 9:49AM (1449 GMT) Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session Dollar index =USD 89.8400 89.8150 +0.04% +0.00% +90.1320 +89.6640 Euro/Dollar EUR=EBS $1.2254 $1.2270 -0.13% +0.30% +$1.2285 +$1.2213 Dollar/Yen JPY=D3 103.8550 103.8300 +0.00% +0.53% +104.0850 +103.6300 Euro/Yen EURJPY= 127.27 127.37 -0.08% +0.27% +127.4600 +126.9600 Dollar/Swiss CHF=EBS 0.8845 0.8855 -0.13% -0.04% +0.8884 +0.8825 Sterling/Dollar GBP=D3 $1.3589 $1.3565 +0.24% -0.48% +$1.3636 +$1.3540 Dollar/Canadian CAD=D3 1.2697 1.2690 +0.05% -0.30% +1.2707 +1.2659 Aussie/Dollar AUD=D3 $0.7769 $0.7769 +0.02% +1.01% +$0.7798 +$0.7741 Euro/Swiss EURCHF= 1.0838 1.0860 -0.20% +0.29% +1.0863 +1.0826 Euro/Sterling EURGBP= 0.9015 0.9044 -0.32% +0.87% +0.9050 +0.8994 NZ NZD=D3 $0.7252 $0.7256 -0.01% +1.03% +$0.7280 +$0.7240 Dollar/Dollar Dollar/Norway NOK=D3 8.3955 8.4260 -0.32% -2.19% +8.4630 +8.3630 Euro/Norway EURNOK= 10.2895 10.3400 -0.49% -1.70% +10.3610 +10.2715 Dollar/Sweden SEK= 8.2073 8.1717 +0.12% +0.15% +8.2293 +8.1809 Euro/Sweden EURSEK= 10.0595 10.0473 +0.12% -0.18% +10.0690 +10.0358

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ UNEMPLOYMENT - JOBS - FLAT VERSIONS U.S. labor market by sector https://tmsnrt.rs/2PxWI7o

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Additional reporting by Gertrude Chavez-Dreyfuss, Editing by Nick Zieminski) ((charles.mikolajczak@tr.com; @ChuckMik; Reuters Messaging: charles.mikolajczak.thomsonreuters.com@reuters.net))