The euro and British pound rose to intraday highs against the dollar, while the dollar and euro did the same against the yen, as the Dow Jones Industrial Average gained about 250 points.
The dollar's and yen's rivals have been tracking stock markets recently, instead of following interest-rate expectations as in the past. Any spike in risk encourages traders to unwind bets that were funded with borrowed dollars -- the reserve currency of the world -- or yen, which had been the cheapest major currency. But when stocks rise, traders extend those bets.
Friday afternoon in New York, the euro was at $1.2763 from $1.2685 late Thursday, while the dollar was at 98.31 yen from 97.75 yen. The U.K. pound was at $1.5672 from $1.5618, and the dollar was at 1.1770 Swiss francs from 1.1794 francs Thursday.
The Labor Department reported payrolls fell by 240,000 in October -- larger than the consensus expected, but less than many analysts considered over the past days -- and the unemployment rate rose to a 14-year high.
"There was so much bad news in the last couple of days, which meant the consensus was kind of out of date," said Jens Nordvig, a currency strategist at Goldman Sachs in New York.
Recent disappointing economic reports included the U.S. Institute for Supply Management's manufacturing and service-sector reports, weekly jobless claims and consumer-spending data.
With traders prepared for the worst, the dollar only briefly gained against the euro and pound, and fell against the yen, before turning around. "Essentially, the currency markets have not really reacted to this [payrolls] data," said David Powell, currency strategist at Bank of America in London.
However, struggling economic conditions should keep the dollar and yen supported, analysts say.
"In this risk-averse environment, we suspect that the dollar and yen will continue to benefit from a shift away from emerging markets," said Nick Bennenbroek, head of currency strategy at Wells Fargo in New York.
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