By Richard Hubbard
LONDON (Reuters) - Slower jobs growth in the United States for July weakened the dollar and sent U.S. Treasury yields lower on Friday as it could make the Federal Reserve more cautious about trimming its stimulus. World shares trimmed gains.
The number of jobs outside the farming sector increased by 162,000 last month although the unemployment rate fell to 7.4 percent, its lowest in over four years. The result was below the median forecast in a Reuters poll for 184,000 new jobs.
"This disappointing payroll number will undo some of the positive market momentum on the economy and the dollar ... and justify the Fed's caution on quantitative easing," said Joseph Trevisani, chief market strategist for WorldWideMarkets.
After the data S&P 500 futures fell 0.7 point, Dow Jones industrial average futures added 14 points and Nasdaq 100 futures rose 6 points, pointing to a weak start on Wall Street.
European shares <.FTEU3> erased some of the gains that had taken them to a two month high before the data was released, while Britain's FTSE 100 index <.FTSE> shed 0.5 percent.
The benchmark 10-year Treasury note, which was in negative territory before the report, was up 21/32 afterwards, its yield easing to 2.63 percent.
The dollar fell against the euro and yen hitting its day's lows. It was last at 99.10 yen, down 0.4 percent, and fell to $1.3270 against the single currency, a gain of 0.45 percent for the euro.
(Editing by Ruth Pitchford)
