LONDON, Jan 30: The dollar rose against the euro on Friday after US growth figures, while sharply negative, were better than had been feared, with the single currency also hurt by eurozone employment data.

The euro in late-day trade was at $1.2800 down from 1.2954 late on Thursday in New York.

The US currency was meanwhile trading at 89.92 yen, down from 89.97 on Thursday.

The yen managed to weather news that the Japanese economy was ailing badly, with industrial production plunging a record 9.6 per cent in December when unemployment shot up to 4.4 per cent of the workforce.

The euro was meanwhile under pressure from data suggesting the European Central Bank might again slash eurozone interest rates, making the currency less attractive to investors.

Unemployment in the countries using the euro rose in December to the highest level in more than two years as joblessness returns as a major headache for Europe, official EU data showed on Friday.

Some 230,000 people lost their jobs in December driving the unemployment rate up to 8.0 per cent, according to a first estimate by the European Union’s Eurostat data agency.

The December outcome marked the ninth consecutive monthly increase in unemployment. Germany, the eurozone’s largest economy, on Thursday reported a sharp surge in joblessness.

In addition, eurozone inflation was reported to have fallen to a near 10-year low in January, slumping to 1.1 per cent in the face of a sharp economic downturn.

The decline brought 12-month eurozone inflation to the lowest point since July 1999 and was down sharply from the 1.6 per cent that the European Union’s Eurostat data agency recorded in December.

The drop, which was greater than economists’ expectations for a slide to 1.4 per cent, brought inflation to well below the European Central Bank’s comfort zone of close to but less than 2.0 percent.

“The sharp rise in German unemployment and the comments by (European Central Bank head Jean-Claude) Trichet suggesting that rates will go lower in the euro zone have helped maintain the steady slide in the euro that began overnight,” said analysts at French bank BNP Paribas.

In London trading, the euro changed hands at $1.2800 against $1.2954 late on Thursday, 115.06 yen (116.56), 0.8898 pounds (0.9059) and 1.4891 Swiss francs (1.4938).

The dollar stood at 89.92 yen (89.97) and 1.1638 Swiss francs (1.1530).

The pound was at $1.4381 (1.4297).

On the London Bullion Market, the price of gold rose to $919.50 an ounce at the fixing from $892.25 late on Thursday. —AFP