The dollar paused against the euro but surged to its highest in two months versus the yen Thursday, bolstered by relatively positive news from the jobs front.
With European leaders struggling to craft a united response to the sovereign debt crisis faced by Greece, the dollar sustained most of its dramatic recent gains against the badly slumping euro.
On her way to a European summit in Brussels, German Chancellor Angela Merkel told German lawmakers that emergency aid combining IMF and joint bilateral aid from the eurozone should be offered only as a “last resort.”
However, other large European nations fear that any aid from the IMF would come with strict conditions, raising the likelihood Greece will default and threatening the viability of the single currency.
The dollar fought back from some early weakness against the euro even as Federal Reserve Chairman Ben Bernanke was on Capitol Hill reiterating the central bank’s intention to keep interest rates near zero for an extended period.
At mid-day in New York, the buck held near 1.3350 against the euro. Yesterday, Fitch lowered Portugal’s credit rating, helping the dollar bust through resistance to 1.3282, a level not seen since last May.
In the latest reading on the US employment situation, official data showed that US jobless claims fell more than forecast last week.
The Labor Department said that initial jobless claims fell to 442,000 from the previous week’s revised figure of 456,000.
The buck extended its strong gains from the previous session against the yen, rising to a 2-month peak of 92.77.
Afternoon gains took the dollar to 1.4855 versus the sterling, within a penny of a 9-month peak sent March 1.
On the flip side, the buck barely budged versus the surging loonie, holding within two cents of parity at C$1.0180.
U.K. retail sales rose at their fastest pace since May 2008 in February, data released by the Office for National Statistics showed Thursday.
Total retail sales volume rose 2.1% month-on-month in February, the first increase in four months, following a 3% decline in January, which was revised from a 1.8% drop reported initially.
In economic news from the euro-zone, the downward trend in consumer morale among Germans is likely to have come to a halt in April, market research group GfK said.
The forward-looking consumer sentiment indicator, based on a survey of about 2,000 Germans, stood at 3.2 in April unchanged from March.