NEW YORK (CNNMoney.com) -- The dollar turned higher against the euro and pound Thursday, as investors turned back to long-term debt problems in Europe and mulled major budget cuts in several countries.
What prices are doing: The dollar rose 0.7% against the euro to $1.2522. It plunged 1.5% versus the pound to $1.4598.
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The U.S. currency was down 0.5% against the Japanese yen at ¥92.73.
What's moving the market: The euro had soared Monday on the announcement of a nearly $1 trillion European rescue package. But by Thursday, investors had turned back to long-term problems in the zone and worried whether countries' major budget cuts would be enough to fix their debt issues.
News reports said Portugal's government had set an austerity plan aimed at cutting 2 billion euros ($2.5 billion) from the country's budget deficit. Officials are expected to approve the plan at a cabinet meeting later Thursday.
Portugal's reported plan comes after Spain's prime minister said its government planned to cut civil service wages by 5% in 2010 and freeze them in 2011. The Spanish government is expected to detail the cuts at a weekly cabinet meeting on Friday.
Spain and Portugal are making the cuts to avoid following in the footsteps of Greece, which saw its sovereign debt downgraded to junk status and was forced to seek aid from the European Union and International Monetary Fund.
What analysts are saying: Camilla Sutton, a currency strategist at Scotia Capital, expects the euro to fall further as the turmoil in Europe deepens.
"At the height of the U.S. financial crisis [the euro] dropped to $1.2330," she said. "We would expect a test of this level as developments in Europe justify a valuation similar, if not worse than in October 2008." 
| Overnight Avg Rate | Latest | Change | Last Week |
|---|---|---|---|
| 30 yr fixed | 3.80% | 3.88% | |
| 15 yr fixed | 3.20% | 3.23% | |
| 5/1 ARM | 3.84% | 3.88% | |
| 30 yr refi | 3.82% | 3.93% | |
| 15 yr refi | 3.20% | 3.23% |
Today's featured rates:
| Index | Last | Change | % Change |
|---|---|---|---|
| Dow | 32,627.97 | -234.33 | -0.71% |
| Nasdaq | 13,215.24 | 99.07 | 0.76% |
| S&P 500 | 3,913.10 | -2.36 | -0.06% |
| Treasuries | 1.73 | 0.00 | 0.12% |
| Company | Price | Change | % Change |
|---|---|---|---|
| Ford Motor Co | 8.29 | 0.05 | 0.61% |
| Advanced Micro Devic... | 54.59 | 0.70 | 1.30% |
| Cisco Systems Inc | 47.49 | -2.44 | -4.89% |
| General Electric Co | 13.00 | -0.16 | -1.22% |
| Kraft Heinz Co | 27.84 | -2.20 | -7.32% |
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