The dollar weakened across the board on Monday, after much weaker-than-expected US jobs data persuaded many in the market that the Federal Reserve is likely to wait until the second half of 2015 before raising interest rates.

Friday's closely watched employment data showed US non-farm payrolls rose by 126,000 in March, the smallest gain since December 2013 and well under the 245,000 economists had forecast. On the brighter side, average hourly earnings increased 0.3 per cent.

The employment data was the latest in a recent series of indicators that portrayed the US economy in a less flattering light and seen making the Fed more cautious towards raising rates.

"Market expectations had momentarily lurched towards a June rate hike, but such prospects have ebbed. A fifty-fifty chance of a hike in September, and that being the only tightening this year, is the view now being re-established," said Koji Fukaya, president at FPG Securities in Tokyo.

The dollar weakened as US Treasury yields sank in wake of the soft jobs data on Friday - albeit in thin trading due to the Good Friday holiday. The benchmark 10-year note yield fell to a two-month low of 1.8 per cent on Friday and last hovered around 1.83 per cent.

The euro was up 0.1 per cent at $1.0980 after touching $1.1018. The common currency had gone as low as $1.0864 before surging on the US jobs data.

The dollar nudged up 0.1 per cent to 119.08 yen after sliding from a high of 119.99 on Friday. The dollar had hit a near eight-year high of 122.04 a month ago, when expectations for a Fed rate hike as early as June were stronger thanks in part to strong non-farm payrolls.

Market participants saw diverging monetary policies still favouring the dollar in the long run. The Fed's counterparts like the European Central Bank and Bank of Japan are deeply committed to easy policies.

"We still see the dollar trending higher in the longer term. The jobs data headline was certainly soft, but we have to consider that jobs had been roughly growing at a pace of 200,000 a month for a year. The rise in earnings was also a plus," said Kyosuke Suzuki, director of forex at Societe Generale in Tokyo.

"Indicators like housing-related data, consumer confidence and initial jobless claims paint a brighter picture and the April non-farm payrolls could give an upside surprise. It helps explain why the dollar's reaction is confined to a 1-yen range so far," he said.

Buoyed by the dollar's broad decline, sterling extended gains against the US currency. The pound was a touch higher at$1.4920, adding to Friday's 0.6 percent gain. Prior to the surge the pound had been weighed down by concerns over political risk ahead of a national election on May 7.

The Australian dollar was little changed at $0.7620 . The Aussie has crawled back from a six-year trough of $0.7534 plumbed last week but its recovery was capped by some expectations that Reserve Bank of Australia will cut interest rates on Tuesday.

Debt markets imply about a 75 per cent chance of a quarter point easing by the RBA on Tuesday.

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