Dollar under pressure amid debt concerns

NEW YORK: Concerns about a possible US credit ratings downgrade coupled with poor economic data sent the dollar lower against the euro, yen and British pound on Thursday.

After weeks of worry about eurozone debt, the tables turned on the dollar, as Moody's warned US lawmakers they had mere "weeks" to reach a deal to raise the debt limit, or face a possible ratings review and downgrade.

The euro rose to $1.4484 by 2200 GMT from $1.4331 the day before.

It was a similar story of dollar weakness versus the Japanese yen, which sold for 80.88 to the dollar, down from 80.92. The pound rose to $1.6365 from $1.6340.

"Considering the amount of potentially bad news that has been thrown at the US dollar today, the resilience of the greenback has been impressive," said Kathy Lien of Global Forex Trading.

The day's trade was dominated by Moody's ratcheting up the pressure on feuding US politicians and low expectations heading into a May US jobs report that will come early Friday.

"If there is no progress on increasing the statutory debt limit in coming weeks, (Moody's) expects to place the US government's rating under review for possible downgrade," the ratings agency said in a statement.

Meanwhile new US jobless claims fell slightly last week but still remained above 400,000, official data showed.

Initial claims for unemployment benefits totaled a seasonally adjusted 422,000 in the week ending May 28, a decrease of 6,000 from the prior week, the Labor Department said.

The dollar stood at 0.8429 Swiss francs (0.8415).

Copyright AFP (Agence France-Presse), 2011