By Rodrigo Campos
NEW YORK (Reuters) - The U.S. dollar index fell from a three-week high on Thursday as chances of a U.S. interest rate hike as soon as September took a hit following a weaker-than-expected U.S. payrolls report, while Wall Street and world stock markets were slightly higher.
Greece heads to a referendum on Sunday that could decide its future in the euro zone. But its effect on financial markets is viewed as mixed, with some analysts saying it will have little influence, though they acknowledge it is ultimately unknown.
Greek Finance Minister Yanis Varoufakis said Thursday the only chance of the country getting back on track was immediate debt relief, something the rest of the euro zone is not prepared to offer.
Markets focused at least initially on the U.S. payrolls number on what is the last market day in the United States this week. Markets will close on Friday for the observance of the Independence Day holiday.
Payrolls increased 223,000 last month, shy of expectations, and 60,000 fewer jobs were created in April and May after revisions. At least 432,000 people dropped out of the labor force.
The Federal Reserve has indicated participation and wage growth are key for its assessment of the health of the labor market. Both were soft in Thursday's report.
"All that means that this is a market-friendly number," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.
"It doesn't warrant the Fed moving any sooner than previously thought, while it is still good enough to suggest that the economy's pattern of growth remains intact."
The Dow Jones industrial average <.DJI> rose 21.21 points, or 0.12 percent, at 17,779.12. The Standard & Poor's 500 Index <.SPX> was up 3.12 points, or 0.15 percent, at 2,080.54. The Nasdaq Composite Index <.IXIC> was down 2.45 points, or 0.05 percent, at 5,010.67.
The pan-European FTSEurofirst 300 index <.FTEU3> slipped 0.1 percent and MSCI's gauge of equities globally <.MIWD00000PUS> ticked up 0.1 percent. Chinese shares <.SSEC> also remained in focus as they suffered another heavy tumble overnight to take their loses over the last six weeks to near 25 percent.
DATA FOCUS
U.S. Treasuries prices rose on the jobs data, with the benchmark Treasury note yield hovering near 2.4 percent.
"Clearly the report was disappointing," said Mark Zandi, chief economist at Moody's Analytics in West Chester, Pennsylvania. "If we continue get this type of payrolls report again in July and August, the Fed won?t move in September."
Benchmark 10-year Treasuries notes
The euro
In a surprise move, Sweden's Riksbank cut its main interest rate deeper into negative territory and upped the size of its bond buying program. It was in response to low inflation but also a bid to prevent a jump in the crown as nervousness over Greece drives investors out of the euro.
The crown weakened 1.1 percent against the euro
In commodities markets, U.S. crude rose 1 percent, helped by the weaker dollar after falling 4 percent the previous session.
U.S. crude
Traders were keeping a close eye on nuclear talks between Western powers and Iran, looking for any sign of a deal to lift sanctions on the oil-rich nation.
(Additional reporting by Richard Leong, Ryan Vlastelica and Sam Forgione in New York and Karolin Schaps in London)
