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* Jobs data disappointment exacerbates thin holiday trading
* Greenback weaker, puts Fed rate rise timing into question
* Dollar down 1 pct vs euro, Swiss franc, Aussie, Kiwi, Loonie
By Daniel Bases
NEW YORK, April 3 (Reuters) - The dollar tumbled on Friday after a significantly weaker-than-expected U.S. jobs report that will increase speculation over whether the U.S. Federal Reserve holds off tightening monetary policy for longer than expected.
U.S. employers added the fewest jobs in more than a year in March amid signs the economy has been hurt by the dollar’s climb to multi-year highs.
Non-farm payrolls rose by 126,000 last month, the smallest gain since December 2013, and well under the 245,000 economists had forecast. The unemployment rate held at a 6-1/2 year low of 5.5 percent.
“This (data) might put back your expectations for a Fed hike of 25 basis points to later in the year rather than June. It moves us toward September,” said Daniel Morris, global investment strategist at TIAA-CREF in New York.
The euro immediately spiked up more than 1 percent following the report. It extended those gains to 1.30 percent, touching a one-week high of $1.10230 on the EBS trading platform.
Trading volumes were very thin owing to the Easter holiday weekend that has much of Europe closed and skeletal staffing at U.S. banks. U.S. stock markets are closed.
In a holiday-shortened bond trading session, the 10-year benchmark U.S. Treasury yield fell to a near two-month low of 1.8020 percent as prices surged 1-1/2 points.
“I‘m not pushing the panic button yet. It is still a Q1 number. I don’t think the Fed will either. We’re not getting a clean read on the economy yet. We had a bad winter for most of the Northeast and any clean read for the economy will come in the next couple of months,” said Win Thin, currency strategist at Brown Brothers Harriman in New York.
The dollar lost ground against its major trading partners’ currencies. The dollar index slid 1 percent to a low of 96.394 .
Against the Japanese yen, the dollar fell to a one-week low of 118.74 yen, off 0.78 percent. The greenback dropped to five-week nadir of 0.94860 Swiss franc.
“Slightly weaker U.S. growth means the dollar is not as strong, but on the other hand the ECB is printing a lot of money and that will matter more eventually. This is a small deviation on the path toward reaching parity. Our forecast for 2015 is $1.05, and for 2016 it is $0.90,” said Morris. (Reporting By Daniel Bases; Editing by Chizu Nomiyama and Dan Grebler)