Interest-rate sensitive U.S. Bond and stock markets also rallied, extending gains packed on earlier this week as doubts clouded earlier forecasts that the Federal Reserve will need to tighten credit a third time this year at its November meeting.

Recent data have shown the economy is slowing on its own,and October's payrolls report, released Friday morning, suggested inflationary pressures remain under control.

While the unemployment rate fell to 4.1 percent, its lowest level in nearly three decades, showing the labour market remains tight, wages rose only a modest 0.1 percent, falling short of the market's forecast or a 0.3 percent gain.

"This is the best combination one could imagine for the dollar, strong growth and low inflation," said Henry Willmore, senior economist at Barclays Capital. "The dollar should continue to rise on these numbers, especially since the sense is the Federal Reserve will not move at its November 16 meeting."

The euro, still bruised after being torpedoed by an interest rate in Europe on Thursday, quickly fell 1/4 of a cent against the dollar to trade as low as $1.0364.