NEW YORK — The dollar lost more ground on Monday following last week's disappointing U.S. jobs data.

The 16-nation euro rose as high as $1.4557 — its strongest level since Dec. 16 — before dipping back to $1.4542 in midday New York trading. Late Friday in New York, the euro was worth $1.4413.

Meanwhile, the British pound rose to $1.6160 from $1.6032, while the dollar slid to 91.86 Japanese yen from 92.64 yen.

On Friday, the U.S. government said employers cut a bigger-than-expected 85,000 jobs in December, while the unemployment rate held steady at 10 percent. Economists had expected only 8,000 job losses.

The U.S. Federal Reserve has said that continuing high unemployment and slack in the economy, alongside subdued inflation, would allow it to leave interest rates very low for an "extended period."

Low rates tend to weigh on a currency because they mean low returns on assets denominated in that currency.

On Monday, comments from Fed official James Bullard during a speech in Shanghai bolstered the view that the central bank would keep rates low for a long time, said Dan Cook, senior market analyst at IG Markets.

"Policy rates are near zero in the U.S. and the rest of the G-7 countries, something not seen in postwar economic history," Bullard said in the speech. "Interest rates may remain low for quite some time."

Bullard said last November that if the Fed follows historical precedent, it could wait until 2012 before raising interest rates.

The dollar enjoyed a December rally as investors priced in a higher chance that the Fed could raise rates in the first half of 2010 thanks to better-than-expected data on jobs and retail sales.

Now some analysts say traders may be rethinking the idea of a rate hike sooner rather than later because of Friday's disappointing jobs report.

"There is a risk at present that previously positive expectations for the U.S. economic outlook face a reversion, delaying the Fed's path as well," said UBS analyst Geoffrey Yu in a research note.

In other midday trading Monday, the dollar tumbled to 1.0145 Swiss francs from 1.0238 francs late Friday, and ticked up to 1.0323 Canadian dollars compared to 1.0319 Friday. (AP)