FOREX-Safe-haven dollar jumps after U.S. job growth slows

* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

(New throughout; previous dateline LONDON)
By Kate Duguid
LONDON, Sept 4 (Reuters) - The U.S. dollar on Friday rose to
its highest in a week as investors bought into the safe-haven
asset after the U.S. Labor Department reported job growth slowed
further in August with financial assistance from the government
virtually depleted, threatening the economy's recovery from the
COVID-19 pandemic.
Programs to help businesses pay wages have either lapsed or
are on the verge of ending and a $600 weekly unemployment
supplement expired in July. Economists credited government
largesse for the sharp rebound in economic activity after it
nearly ground to a halt following the shuttering of businesses
in mid-March. The safe-haven dollar's bounce comes after weeks of losses.
The greenback fell to an April 2018 low of 91.74 on Tuesday
after the U.S. central bank overhauled its policy framework last
week, which would allow it to keep rates lower for longer
periods, a negative for the dollar. Despite the rally in the second half of the week investors
see a downward trajectory for the dollar in the longer term.
"Dollar rallies are going to be faded unless there is a
major surprise on the risk front," said Mazen Issa, senior
foreign exchange strategist at TD Securities.
The dollar's downtrend will continue for at least another
three months due to the outlook for the Fed's monetary policy, a
Reuters poll of analysts showed on Friday. The drop in the dollar at the start of the week pushed the
euro above the key $1.20 level for the first time since 2018.
But those gains quickly faded after European Central Bank chief
economist Philip Lane said the eurodollar exchange rate "does
matter" for monetary policy, suggesting the euro's rise had come
too fast and strong for the ECB's liking.
"The focus is going to be on what happens at the ECB meeting
next week," said Issa.
Against a basket of currencies =USD , the dollar was
trading up 0.37% to 93.179. On a weekly basis, it is up about
1%, its biggest weekly rise since the first week of April. The
euro EUR= was trading down 0.43% to $1.180.