* Euro hit by reported Greek comments
* U.S. jobless claims fall; inflation contained
* Risk demand dwindles, high-risk FX edge lower
(Adds comment, U.S. data, updates prices, changes byline,
dateline; previous LONDON)
By Gertrude Chavez-Dreyfuss
NEW YORK, March 18 (Reuters) - The euro weakened against
the dollar on Thursday as a published report saying Greece was
not optimistic about receiving aid from euro zone members
heightened uncertainty over a resolution to its debt problems.
An unidentified Greek official quoted in the report said
Greece was increasingly pessimistic about the prospect for
assistance at a March 25 European Union summit and may seek
International Monetary Fund aid during the April 2-4 Easter
weekend.
"We have seen some euro weakness just on the uncertainty
over who will aid Greece. It seems that Greece could lean
toward the IMF and this has spurred a little bit of risk
aversion," said Camilla Sutton, senior currency strategist at
Scotia Capital in Toronto.
Greece, battling with crippling debts, has said it is
counting on EU leaders to approve a mechanism to help the
country at next week's meeting.
But some countries -- especially Germany, the EU's biggest
paymaster -- are wary of making concrete promises and analysts
said the Dow Jones Newswires report suggested a rift between
Greece and Germany may be deepening. For more see
[].
Comments from German Chancellor Angela Merkel saying on
Wednesday the Greek crisis had landed the euro with its biggest
challenge were also putting selling pressure on the euro zone
single currency. []
In early New York trading, the euro <EUR=> was down around
0.4 percent on the day at $1.3678, pulling back from a
five-week high hit on Wednesday.
"It's noteworthy that we're still in yesterday's ranges and
even the euro has bounced off its lows. We have seen it
stabilize and the euro is now trading within a band," Scotia's
Sutton said.
The euro struggled as European shares <> retreated
from a 17-month closing high hit on Wednesday, while prices for
oil <CLC1>, another risky asset, fell 0.5 percent on the day.
The euro hit the day's low at $1.3648 in early European
trade, but losses were limited due to suspected demand from
Asian central banks around that level, traders said, while
trendline support around $1.3640 also prevented more losses.
The dollar rose 0.46 percent against a basket of currencies
to 80.005 <.DXY>. The greenback slipped 0.2 percent to 90.13
yen <JPY=> as the Japanese currency benefited from risk
aversion, pushing the euro <EURJPY=R> down 0.5 percent to
123.35 yen.
Data showing a fall in the latest U.S. weekly jobless
claims data and that U.S. inflation was contained spurred
modest dollar selling on slightly higher risk appetite, but
overall markets was cautious and focused on Greece.
"The jobless claims number shows the labor market continues
to stabilize, however there is very little if any price
pressure in the U.S. which would allow the Fed to leave
interest rates low for some time," said John Doyle, foreign
exchange strategist at Tempus Consulting in Washington.
"It is a very dollar muted reaction so far and the dollar
will continue to trade on fears the Greek bailout plan may be
unraveling."
Against the Canadian dollar <CAD=D4> the U.S. dollar pulled
back from a 20-month low of C$1.0071 on Wednesday to trade at
C$1.0101 but analysts see the pair hitting parity in the near
term on speculation that Canadian interest rates may soon
rise.
(Additional reporting by Neal Armstrong in London and Nick
Olivari in New York; Editing by James Dalgleish)
