* Euro <EUR=> hits 3-wk low vs dlr on weak Greek GDP, jobs
* Greek CDS rises as data raises solvency concerns
* Yen pares losses as intervention fears ease
(Adds comment, details, updates prices)
By Naomi Tajitsu
LONDON, Aug 12 (Reuters) - The euro hit a three-week low
against the dollar on Thursday after weak Greek data highlighted
the problems facing some euro zone economies, while the yen
pared losses on easing fears of immediate action to stem the
yen's rise.
The euro reversed earlier gains versus the dollar after
Greek gross domestic product figures came in below forecast and
unemployment jumped, which analysts said brought Greece's
long-term solvency issues to the fore again. []
Underlining such concerns, the cost of protecting Greek
government debt against default rose, with five-year credit
default swaps widening around 30 basis points to 795 basis
points after the data. []
"The Greek data reinforces concerns that the Greek
authorities may back away from austerity measures and move
towards haircuts or even sovereign default," said Lee Hardman,
currency analyst at BTM-UFJ.
By 1111 GMT, the euro <EUR=> traded slightly lower on the
day at $1.2821 after hitting a session trough of $1.2800,
according to Reuters data. It retreated from the day's high of
$1.2932, and was testing the 100-day moving average at $1.2807.
The euro extended its losses after tumbling 2.6 percent on
Wednesday, its biggest one-day loss since October 2008.
"The euro sell-off we've seen this week has been down to
concerns about the peripheral euro zone economies," said Jane
Foley, research director at Forex.com.
Market participants said the euro was supported around
$1.2800 and that the focus was on whether the single currency
would fall below $1.2790, roughly the low hit on July 23, when
the results of the European bank stress tests were announced.
The dollar <.DXY> rose 0.5 percent versus a currency basket
to 82.679, its highest since late July. It extended gains made
on Wednesday, when concerns about the U.S. and global economies
triggered a wave of unwinding of short dollar positions.
INTERVENTION FEARS EASE
The dollar <JPY=> was 0.2 percent higher versus the yen at
85.35 yen after rising as high as 85.82 in early trade. It
stayed close to a 15-year low hit on Wednesday at 84.72, in a
move driven largely by a narrowing spread between U.S. and
Japanese government bond yields. []
The dollar had bounced against the yen in early trade, aided
by market sources telling Reuters the Bank of Japan checked
exchange rates with banks earlier on Thursday. [].
But it pulled away from the day' high after Japanese Finance
Minister Yoshihiko Noda later reiterated the government's
position that it is closely watching currency movements and that
disorderly moves would hurt the economy. []
"The market is somewhat disappointed that nothing
significant came out of the Noda press conference on the policy
front. His comments were largely neutral," Hardman said.
Noda's comments came after Japanese Prime Minister Naoto Kan
was quoted as saying yen moves have been 'rough', and some
analysts said this suggested Japanese authorities may be
stepping up efforts to reign in yen strength. []
"The prime minister is saying that currency movements are
'rough' and there have been discussions on currencies between
the BOJ and the Finance Ministry, so you could say they've taken
the next step towards intervention," said Lutz Karpowitz,
currency strategist at Commerzbank in Frankfurt.
"If you look at the frequency of statements, you can clearly
see that the efforts of verbal intervention are clearly higher
than a week ago."
Still, he added that the dollar's latest slide against the
yen has been a controlled one, and analysts say Japanese
authorities may have difficulty justifying an orderly decline in
the dollar against the yen.
(Additional reporting by Neal Armstrong; Editing by Hugh
Lawson)
