By William L. Watts, MarketWatch
LONDON (MarketWatch) -- The U.S. dollar was moderately higher versus major rivals Thursday, with the euro continuing to lose ground as Greece's debt woes deepened.
Greek government bond yields continued to soar, with the premium demanded by investors to hold Greek paper over benchmark 10-year German bonds hitting 4.4 percentage points -- the highest since the introduction of the euro. The cost of insuring Greek debt against default also soared to a record.
The euro (CUR_EURUSD 1.3308, -0.0031, -0.2324%) traded at $1.3297, down from $1.3375 in late North American trading Wednesday.
Economists said the credit woes underlined the failure of an agreement by euro-zone leaders last month to provide a standby European-International Monetary Fund aid package for Greece to reassure investors.
"With or without support from the E.U., the bottom line remains that after years of fiscal mismanagement the market has little confidence that Greece can swallow the necessity austerity measures and slash its budget deficit," said Jane Foley, research director at Forex.com.
Pressure on the euro is likely to continue "until the uncertainties surrounding Greece are resolved, suggesting it could be a long and painful summer for the euro," Foley said.
Attention will now turn to ECB President Jean-Claude Trichet's 8:30 a.m. monthly news conference. He's expected to be peppered with questions about Greece's debt woes.
Earlier, the ECB announced it had left its key lending rate unchanged at 1%, as expected.
The Bank of England also offered no surprises in the last meeting of its Monetary Policy Committee before the May 6 British general election. The panel left the bank's key lending rate at 0.5% and made no additions to the 200 billion pounds ($304.8 billion) in bond purchases already made under its quantitative-easing program. Read about the central bank decisions.
The British pound was down 0.3% versus the U.S. dollar at $1.5191. The pound showed little initial reaction to the widely-expected rate news, but later drifted below the $1.52 level.
The dollar fell versus the Japanese currency to 93.07 yen, down from 93.29 yen Wednesday.
The dollar index (DXY 81.79, +0.35, +0.42%) , which measures the U.S unit against a trade-weighted basket of six major currencies, rose to 81.753 from 81.446 late Wednesday.
