The euro fell against the dollar yesterday as a stronger-than-expected US labour market report fuelled expectations of another US interest rate rise next month.

US Labour Department figures showed employment jumped by 387,000 in January from December, compared to expectations of a 267,000 increase, pushing the unemployment rate to its lowest for 30 years, at 4.0 per cent, from 4.1 per cent the previous month.

Analysts said the euro's bounce-back on Thursday was due to traders short-selling shares in Germany's Mannesmann conglomerate to buy Vodafone Airtouch stock. When those positions started to be reversed, capital flowed back into the euro.

Another adverse factor for the euro was German finance ministry figures showing manufacturing orders fell a seasonally adjusted 1.9 per cent in December from November, up an unadjusted 13.8 per cent from a year ago. This compared with economists' forecasts for a month-on-month increase of 0.5 per cent and a rise of 17.2 per cent year-on-year.