By Victor Reklaitis and Sara Sjolin, MarketWatch

NEW YORK (MarketWatch)--The dollar dropped against most major rivals on Friday in the wake of a worse-than-expected jobs report, though it erased some losses by day's end and still gained for the week.

While the greenback lost ground Friday, its trend for the summer has been up. The oft-cited reason for the advance is that as the U.S. economy improves, the Federal Reserve is winding down its bond-buying program and is seen hiking interest rates next year--in contrast with the Bank of Japan and the European Central Bank.

But the jobs report indicated some weakness. The U.S. economy created just 142,000 jobs in August, while economists polled by MarketWatch had expected an increase of 228,000.

Matt Weller, senior technical analyst at Forex.com, said his shop expects the dollar uptrend will resume. "From a trading perspective, the reaction to the payrolls miss was sharp but relatively shallow," he also said in emailed comments.

The euro rose Friday after falling to a 14-month low as the European Central Bank on Thursday cut interest rates and announced a "private QE" program in an effort to fight off low inflation. (Read more: The reluctant firefighters at the ECB start dousing the flames http://www.marketwatch.com/story/the-reluctant-firefighters-at-the-ecb-start-dousing-the-flames-2014-09-04.)

The shared currency (EURUSD) was recently at $1.2956, up from $1.2944 in late North American trade on Thursday.

Meanwhile, the dollar (USDJPY) fell against the yen to buy Yen105.07, from Yen105.26 late Thursday in New York. The pound (GBPUSD) declined to trade at $1.6326, compared with $1.6344 on Thursday.

The ICE dollar index (DXY), which tracks the U.S. currency against a basket of major rivals, traded recently at 83.753, down from 83.820 late Thursday in New York. The index still gained for the week, rising from 82.721 on Aug. 29.

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