BISINISS WORLD NEWS

NEW YORK: The dollar was slightly lower Thursday against the euro as concerns over the Greek debt crisis continued to dog the single European currency.

The euro was hovering at 1.3546 dollars around 2200 GMT from 1.3534 dollars late Wednesday after languishing most of the day below the 1.3500 level.

The single European unit fell against the Japanese currency, to 120.71 yen from 121.99 yen late Wednesday.

The dollar declined slightly to 89.09 yen from 90.12 yen.

The euro recovered a little as investors locked in profits by selling the dollar, which has chalked up strong gains recently, traders said.

But the euro rebound may be short-lived, said Marc Chandler of Brown Brothers Harriman.

"Market focus once again is on renewed pressure on the euro," analysts at PNC bank said in a client note, noting that credit rating agency Moody's joined rival Standard & Poor's in warning of a possible Greek credit downgrade.

A new downgrade could put Greece in a high-risk investment category, making it even more expensive to borrow money to meet its obligations.

The euro traded "within a hair" of its nine-month low against the dollar on an intraday basis a few times before moving into positive territory, said Kathy Lien, director of currency research at Global Forex Trading.

"Economic data in the US was very weak and more troubles in the eurozone caused a wave of risk aversion throughout the European and early US trading session," she said.

The US Labor Department said new claims for jobless benefits jumped to a three-month high, underscoring ongoing struggles for the labor market and the economic recovery.

The seasonally adjusted initial claims in the week ending February 20 rose to 496,000, an increase of 22,000 from from the previous week's revised figure of 474,000, the department said.

Analysts said that if the jobs picture fails to improve, that could spell trouble for the recovery from recession.

Meanwhile Europe's economic outlook dimmed considerably on Thursday when officials revealed feeble growth, sliding confidence and tight lending, as shockwaves mounted over the debt crisis in Greece.

New forecasts released by the European Commission showed that economic growth across Europe will be uncertain, fragile and dwarfed by emerging Asian rivals throughout 2010, with an upturn in global trade bypassing the bloc.

"The eurozone recovery is clearly struggling for momentum," said Howard Archer, chief European economist at research group IHS Global Insight, with the European Commission itself warning that "the rebound appears to have lost its momentum."

In late New York trade, the dollar fell to 1.0802 Swiss francs from 1.0810 late Wednesday.

The pound dropped to 1.5263 dollars from 1.5405.