NEW YORK (Bloomberg) — The dollar declined beyond $1.36 against the euro for the first time since March as a report showing slower deterioration in the US labour market reduced demand for the relative safety of the country's assets.

Canada's currency advanced yesterday to the highest level versus the greenback since November on that nation's unexpected addition of jobs in April. The yen slid versus all but two of the 16 most traded currencies tracked by Bloomberg and touched a seven-month low against Australia's dollar as evidence the recession is easing spurred demand for higher yields.

"The platform is here for significant dollar weakness for the rest of the year," said Tom Fitzpatrick, chief technical analyst at Citigroup Global Markets Inc. in New York. "The dollar is going to get hit and hit hard in the months ahead."

The dollar lost 2.7 percent to $1.3634 versus the euro yesterday, from $1.3273 on May 1. It touched $1.3651 yesterday, the weakest level since March 25. The greenback dropped 0.7 percent to 98.47 yen, from 99.11. The euro increased two percent to 134.23 yen, from 131.59.

The ICE's trade-weighted Dollar Index, whose biggest component is the euro, touched the lowest level since January 9. It fell 1.7 percent yesterday, the biggest one-day decrease since March 19, the day after the Federal Reserve said it would buy up to $300 billion in Treasuries to keep interest rates low and stimulate the economy.

The euro gained versus the dollar for a third straight week on speculation the European Central Bank's plan to buy 60 billion euros ($80.5 billion) in covered bonds isn't aggressive enough to debase the currency. President Jean-Claude Trichet told reporters in Frankfurt on May 7 the purchase of the debt is a "credit easing".

"The euro has appreciated against almost everything, including the Japanese yen," said Hidetoshi Yanagihara, senior currency trader at Mizuho Corporate Bank in New York. "Risk appetite just came back on the optimistic view of the near-term US economy."

The yen dropped 4.9 percent versus the New Zealand dollar and 4.4 percent against the Australian dollar last week as a more optimistic global economic outlook prompted investors to get funds in countries with low borrowing costs and buy assets where returns are higher. The Bank of Japan's target lending rate of 0.1 percent compares with three percent in Australia and 2.5 percent in New Zealand.

Japan's currency fell yesterday to 75.91, the weakest level against the Aussie since October 6, and reached 59.52 versus the kiwi, the weakest since April 6.

Global stocks advanced yesterday on the US jobs report, extending the Standard & Poor's 500 Index's weekly rally to 5.9 percent, the biggest since March. Treasuries fell this week, pushing the 10-year note's yield to 3.38 percent yesterday, the highest level since November.

The Dollar Index, which the ICE uses to track the greenback against the euro, yen, pound, Canadian dollar, Swedish krona and Swiss franc, fell for a third straight week, the longest stretch of decreases since December.

US companies eliminated 539,000 jobs in April after a revised decrease of 699,000 in the previous month, the Labour Department reported yesterday in Washington. The median forecast of 70 economists surveyed by Bloomberg was for a drop of 600,000.