NEW YORK (Reuters) – The U.S. dollar bounced on Friday following U.S. job expansion for July surpassed low expectations but nevertheless showed a sharp drop from June, while investors kept an eye on continuing stimulation talks in Washington. FILE PHOTO: U.S. Dollar banknotes are observed in this picture case taken February 12, 2018. REUTERS/Jose Luis Gonzalez/IllustrationThe U.S. Labor Department’s report revealed nonfarm payrolls increased by 1.76 million in July. While this has been better compared to 1.6 million economists surveyed by Reuters had forecast, it was sharply lower than the album 4.8 million in June. The dollar index, which measures the dollar against a basket of currencies, climbed in the aftermath of the report and also reach its highest in 3 times. It was last up 0.6% at 93.419 =USD. “U.S. labor market report has painted a strong picture of the jobs recovery… However it is clear that the recovery remains fragile and depends significantly on the progress of the virus,” stated Michael Brown, senior analyst in payments company Caxton, in London. “The dollar has, in reaction, found a bid in the afternoon session, with the market having shrugged its shoulders at the payrolls report, and instead focusing on the continued stalemate over a fifth stimulus bill, with today’s solid jobs numbers potentially reducing the feeling of urgency to act among some lawmakers,” he explained. U.S. Republicans and Democrats have failed to achieve a deal on the expense of financial stimulus measures that lots of investors state is imperative to stop the market from dropping more momentum. The U.S. dollar index’s =USD rally Friday may not signify an end to its latest weakness, some analysts stated. “One month’s survey isn’t going to be enough to meaningfully arrest the fall in the dollar,” said Joe Manimbo, senior market analyst in Western Union Business Solutions at Washington. The euro has retreated from recent highs, and was last down 0.8% at $1.1785 EUR=EBS, although the British pound fell 0.8% to $1.3042 GBP=D3. The risk-sensitive Australian dollar fell, hurt by concerns about penalizing U.S.-Chinese relations along with the Reserve Bank of Australia’s downbeat assessment of the local market. It was last down 0.8% .7175 AUD=D3. President Donald Trump on Thursday issued an executive order prohibiting trades with ByteDance, the Chinese firm that possesses the video-sharing app TikTok, as well as Tencent Holdings Ltd (0700.HK), that possesses the WeChat messaging program. The buck is at its oversold degree in over 40 decades, investment bank Morgan Stanley said on Friday, including it had shifted from its dollar-bearish position and flipped “tactically neutral” on the U.S. money. Reporting by Caroline Valetkevitch; added reporting by Saqib Iqbal Ahmed and Olga Cotaga; editing by Emelia Sithole-Matarise, Jane Merriman and Dan GreblerOur Standards:The Thomson Reuters Trust Principles.