Euro hits low vs Swiss franc, bonds rally

NEW YORK: The euro fell to a record low against the Swiss franc on Thursday on worries that Greece was again teetering on the brink of financial crisis, driving a bid for safe-haven US government bonds.

Comments from Eurogroup President Jean-Claude Juncker rattled markets and raised doubts about whether the International Monetary Fund would release Greece's next round of financial assistance at the end of June.

After initially wobbling over the Greece worries, US stocks squeezed out modest gains, but US crude oil fell more than 1 percent on disappointing US economic growth and jobs data.

Still, the euro zone sovereign debt fears stuck with investors.

"There has been a lot of back and forth between the EU and the ECB on IMF aid to Greece, and that does not help the euro at all," said Kathy Lien, director of currency research at GFT Forex in New York.

The latest US economic data underscored the view that the country's recovery has hit a rough patch.

The US economy grew at an annual 1.8 percent rate in the first three months of this year, the Commerce Department said, unchanged from an earlier estimate and weaker than most forecasts.

A separate report from the Labor Department showed the number of Americans claiming unemployment benefits unexpectedly rose last week by 10,000 to 424,000.

The euro was down for a fifth day against the Swiss franc. It fell as low as 1.22045 Swiss francs on electronic trading platform EBS and last traded down 0.5 percent on the day at 1.2242 francs.

Against the dollar, the euro changed hands at $1.4128, up 0.3 percent on the day. It had earlier risen to $1.42069 on EBS after an article in the Financial Times quoted the chief of the European Financial Stability Facility as saying China was "clearly interested" in buying bonds for the Portugal bailout to be issued in mid-June.

The US dollar was down 0.5 percent against a basket of major currencies.

US benchmark 10-year Treasury note prices rose 20/32, with a yield of 3.06 percent, the lowest level since Dec 7.

"For the US economy, it's like Groundhog Day like what we saw a year ago," when the economy weakened after the end of the first quantitative easing program, said Bob Baur, chief global economist at Principal Global Investors in Des Moines, Iowa, which oversees $235 billion in assets.

Stocks brushed aside those concerns, and focused instead on upbeat earnings from companies including Tiffany & Co, whose shares gained 8.6 percent to $76.04. NetApp Inc's stock also was buoyed by strong results.

Stocks have struggled in recent weeks to extend their latest rally that began in September. The benchmark Standard & Poor's 500 Index has gained 27 percent since the end of August.

The Dow Jones industrial average rose 8.10 points, or 0.07 percent, to end at 12,402.76. The Standard & Poor's 500 Index gained 5.22 points, or 0.40 percent, to end at 1,325.69. The Nasdaq Composite Index advanced 21.54 points, or 0.78 percent, to end at 2,782.92.

The MSCI Latin American index rose 1.8 percent, adding to gains that have pulled it off an eight-month low reached on Monday. In Europe, the FTSEurofirst 300 index ended down 0.07 percent.

On the New York Mercantile Exchange, the July crude contract fell $1.09, or 1.08 percent, to settle at $100.23 a barrel, while Brent crude rose 12 cents to settle at $115.05 a barrel.

Gold was led down by a drop in euro-priced bullion after the single European currency came under sudden pressure, although safe-haven buying limited declines.

Spot golddeclined to $1,520.40 an ounce. On Wednesday, bullion prices rose to $1,532.10 their strongest since May 4.

Copyright Reuters, 2011