Dollar buoyed by Greece jitters

By Ben Rooney, staff reporter


NEW YORK (CNNMoney.com) -- The dollar rose against the euro Thursday on renewed concerns about the fiscal meltdown in Greece and a surprise jump in U.S. jobless claims.

What prices are doing: The dollar was up 0.6% versus the euro at $1.3573. The greenback fell 0.2% against the U.K. pound at $1.5495 and slipped 0.2% versus the yen to ¥93.06

What's moving the market: The dollar remained firm after the government said the number of Americans filing first-time claims for unemployment benefits rose last week.

There were 484,000 initial jobless claims filed in the week ended April 10, up 24,000 from 460,000 the previous week, according to the Labor Department's weekly report.

Economists surveyed by Briefing.com expected new claims to fall to 440,000 in the week. The number of new claims was the highest since the Feb. 20 week, when initial claims totaled 486,000.

Meanwhile, the euro came under pressure as yields on Greek bonds spiked on speculation that a sale of U.S.-dollar-denominated bonds Athens plans to hold later this month could be smaller than anticipated.

The report revived lingering worries that Greece will require more aid from the European Union and International Monetary Fund to stave off a possible default.

Concerns about Greece were tempered earlier this week after EU officials announced a plan to provide an additional $40 billion in low-cost loans for the debt-stricken nation. The International Monetary Fund agreed to kick in $13.5 billion.

But the outlook for Greece remains fraught and investors tend to punish the euro and other investments that are considered high risk whenever the nation's plight is in the news.

Elsewhere, a report from China's National Statistics Bureau said the nation's economy expanded 11.9% in the first quarter of 2010. China's gross domestic product, the broadest measure of economic activity, rose 1.2% from the fourth quarter of 2009.

What analysts are saying: Sacha Tihanyi, currency strategist at Scotia Capital, said the market's muted response to China's robust economic growth was surprising.

The euro and other major European currencies are being battered by concerns about Greece's ability to raise financing without assistance from its neighbors or the IMF, he said.

"Though it seems that greater clarity is in place following the weekend announcement of the bailout package details, it is difficult to find a justification to buy a currency that would see a member state require emergency financing to avoid default," Tihanyi wrote in a research report.  To top of page

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