Dollar rises against euro on Greece debt woes

By Hibah Yousuf, staff reporter

NEW YORK ( -- The dollar was mostly higher Thursday as fears about Greece's debt crisis resurfaced, prompting investors to cut their exposure to the higher-yield currencies.

What prices are doing: The dollar rose 0.1% against the euro to $1.3390 and climbed 0.9% against the British pound to $1.5267. The dollar fell 1.2% against the yen, which also tends to strengthen on risk aversion, to ¥89.08.

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The dollar was softer against the euro, pound, and yen Wednesday after Federal Reserve chairman Ben Bernanke warned lawmakers on the House Financial Services Committee that the the weak labor market remains a concern, and the central bank will continue to hold its benchmark rate near zero.

What's moving the market: Investors flocked to the dollar for its safe-haven appeal after credit agencies threatened to downgrade Greece's sovereign debt next month if the country doesn't work to reduce its deficit.

Jitters were also fueled by a strike that began Wednesday led by Greek workers protesting against government measures aimed at slashing the national debt.

Renewed debt concerns weakened risk appetite, sparking a selloff on Wall Street and dragging on commodities. Stocks tumbled earlier in the session and crude oil prices sank nearly 4%, but both markets pared some losses by the time they closed.

The flight to safety was also driven by a weak jobs report, which showed that the number of Americans filing for jobless claims surged to almost 500,000, rising more than 12% over the last two weeks. The jump surprised analysts, who were expecting claims to drop.

Bernanke returned to Capitol Hill for day two of his semi-annual monetary policy testimony, this time before the Senate Banking Committee, and repeated the previous day's message.

What analysts are saying: The threat of Greece's default has left investors feeling uncertain about global economic recovery, said John Kicklighter, currency strategist at

The wariness has triggered traders to pull back on risky assets such as stocks and high-yield currencies, and instead dig into safer assets like the dollar.  To top of page

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