Forex - EUR/USD firms on lackluster U.S. July jobs report

The euro firmed against the dollar on Friday after data revealed the U.S. economy picked up far fewer jobs in July than markets were expecting.

The data weakened the dollar by dashing hopes U.S. recovery was gaining steam and close to prompting the Federal Reserve to begin tapering dollar-weakening stimulus measures.

In U.S. trading on Friday, EUR/USD was up 0.61% at 1.3288, up from a session low of 1.3190 and off from a high of 1.3294.

The pair was likely to find support at 1.3166, the low from July 25, and resistance at 1.3345, Wednesday's high.

The Bureau of Labor Statistics said the U.S. economy added 162,000 jobs in July, missing expectations for an increase of around 189,000. 

The report also revealed that the U.S. unemployment rate ticked down to 7.4% in July, from 7.6% the previous month. Analysts had expected the unemployment rate to slip to 7.5% last month. 

Still, the numbers dampened expectations for the Federal Reserve to begin tapering its USD85 billion monthly bond-buying program, seeks to spur recovery by keeping long-term interest rates low, weakening the greenback in the process.

The Fed is due to meet in September to discuss policy, though concerns began to build that monetary authorities may wait until December to begin tapering the stimulus program and let the economy stand on its own, which would support the greenback when such a decision takes place.

Meanwhile in the euro zone, official data showed that the number of unemployed people in Spain fell for the fifth consecutive month in July, declining by 64,900 after a 127,200 fall the previous month. 

Analysts had expected the number of unemployed people to fall by 80,000 last month.

The euro, meanwhile, was down against the pound and down against the yen, with EUR/GBP trading down 0.56% at 0.8688 and EUR/JPYtrading down 0.11% at 131.33.

The London-based Markit research group reported earlier that its U.K. construction purchasing managers' index rose to 57.0 in July from 51.0 in June, blowing past expectations for a rise to 51.5 and expanding at the fastest pace since July 2010. 

A separate report showed that house price inflation in the U.K. rose 0.8% last month, more than the expected 0.4% gain after an increase of 0.3% in June.