Euro Kept Under Pressure By Greek Debt Concerns

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The euro hit fresh yearly lows against the yen and remained under pressure against the dollar on Thursday amid renewed pessimism about the global recovery. The higher-yielding euro has been in retreat of late, hurt by risk aversion and worries that Greek debt problems will spread to other member states.

S&P says that it may downgrade the Greek sovereign debt rating by the end of March.

The euro slumped to 1.3450 versus the dollar, coming within a hair of last week's 9-month low of 1.3444 before finding support.

Traders considered another round of troubling data on the US jobs situation and a second day of Congressional testimony by Fed Chair Ben Bernanke.

In another disappointing sign for the beleaguered labor market, the Labor Department report showed another unexpected increase in first-time claims for unemployment benefits in the week ended February 20th.

The report showed that initial jobless claims rose to 496,000 from the previous week's revised figure of 474,000. Economists had been expecting jobless claims to slip to 460,000 from the 473,000 originally reported for the previous week.

On Capitol Hill, Bernanke reiterated that extraordinarily low interest rates are necessary for an extended period in order to support a gradual economic recovery.

The gloomy mood about the global economy helped drive up the value of the safe haven yen. The euro dropped to a yearly low of Y120.

In economic news from across the Atlantic, eurozone economic sentiment indicator fell to 95.9 in February from 96 in January after ten months of uninterrupted increases, results of a survey conducted by the European Commission showed Thursday.

Meanwhile, German unemployment increased for the second month in February.

(Market News Provided by RTTNews)