Dollar stronger on dour economic news
Demand for safe haven boosts the greenback after grim jobs report.
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NEW YORK (Reuters) -- The dollar drifted higher on Thursday as weaker-than-expected U.S. data in recent days stoked concerns the worst of the global financial crisis has not passed, boosting safe-haven demand for the greenback.
A surprisingly large rise in weekly jobless claims and Wednesday's unexpected decline in U.S. retail sales heightened uncertainty and dulled the market's appetite for risky assets such as stocks and some higher-yielding currencies.
"Withering hopes of a sustained recovery and stretched speculative market positions in risk FX majors have triggered a wave of develeraging which is benefiting the yen and the dollar," said Lena Komileva, head of G-7 market economics at Tullett Prebon in London.
"Higher volatilities and weaker equities are likely to underpin U.S. dollar strength as investors look to hedge the risk overhang accumulated after the recent rally in risk assets."
The dollar is often considered a safe-haven bet in times of uncertainty.
In early New York trading, the euro fell 0.2% to $1.3573, pulling back from a session high around $1.3623 hit after European shares briefly recovered earlier losses and turned positive.
The dollar, however, was up versus the yen at 95.70
The dollar initially fell against the Japanese currency after data showed U.S. jobless claims rose to 637,000 in the latest week, compared with forecasts of 610,000. But the dollar's losses were not sustained.
"The claims were a bit weaker than expected, though it appears a big part of that is related to the auto sector," said Shaun Osborne, chief currency strategist at TD Securities.
"So we might not see too much follow-through to the dollar's move against the yen. The dollar is already rising against some other currencies." 
