By Bradley Davis Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--The dollar fell against the yen Thursday after worse-than-expected weekly U.S. jobless claims led to fresh concerns over the pace of the U.S. recovery. The euro fell from an intraday high over $1.32 to emerge only slightly higher against the dollar in the wake of European Central Bank President Jean-Claude Trichet's comments that indicated euro-zone growth had been better than expected in the second quarter but could be less buoyant in the second half of the year. After the euro zone has "weathered the storm," at least so far, of euro-zone sovereign debt, some investors might have expected Trichet to sound a more-optimistic note than he did on the region's economy, but "overall, the tone wasn't massively changed," from last month's statement, said Daragh Maher, deputy head of global foreign exchange strategy at Credit Agricole CIB in London. The lack of a marked change in Trichet's tone could have disappointed some investors, leading the euro to surrender its earlier highs, Maher said. The ECB earlier left key rates unchanged, as did the Bank of England. Neither the euro nor pound reacted in the immediate wake of the central bank decisions. Thursday morning, the euro was at $1.3180 from $1.3169 late Wednesday, according to EBS via CQG. After the weaker-than-expected jobless claims figures, the common currency rose to an intraday high of $1.3236. The dollar was at Y85.88 from Y86.30, while the euro was at Y113.14 from Y113.65. The U.K. pound was at $1.5875 from $1.5901. The dollar was at CHF1.0446 from CHF1.0523. The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, was at 80.800 from 80.938. Sending the dollar below Y85 was the unexpected increase in the number of idled U.S. workers making new claims for jobless benefits. Claims rose late week to the highest level in nearly four months, raising concerns about the labor market's recovery. Initial unemployment claims climbed 19,000 to 479,000 in the week ended July 31, the Labor Department said in its weekly report Thursday. The last time claims were this high was the week of April 10. The increase defied the expectations of economists surveyed by Dow Jones Newswires, who had predicted filings would dip by 2,000 to 455,000. The weaker-than-expected U.S. jobs figures come ahead of Friday's key U.S. nonfarm payrolls figures, which could pressure the dollar further if they also disappoint expectations, analysts said. The euro earlier rallied against the dollar on the heels of a strong Spanish bond auction and better-than-expected German manufacturing data, pointing to a continued easing of concerns over the region's debt crisis. German manufacturing orders surged 3.2% in June from the previous month on strong foreign demand, government data showed Thursday. The increase was more than twice as high as expected. Trichet said Thursday in a post-rate-setting press conference that he had "no particular message" on the recently strengthening euro, which has rebounded against USD from 1.1876 low in early June to hover around 1.32, and whether it could harm Europe's exports. The common currency remained up against the dollar in the wake of the ECB's decision to leave rates unchanged. Separately, the BOE's Monetary Policy Committee earlier kept its stock of bond purchases at GBP200 billion and its key interest rate at its all-time low of 0.5%, amid indications the economic pickup is slowing, even as price pressures mount. "The bank has been struggling to reconcile recent high inflation with a weaker growth outlook, and at this point it can do little more but to wait and see in which direction the uncertainty unfolds," said Lena Komileva, head of G7 market economics at Tullett Prebon in London. Canada Morning The Canadian dollar hit a three-month high Thursday morning as it extended its earlier rally after some unexpectedly robust Canadian economic data. The U.S. dollar is at C$1.0138 from C$1.0167 late Wednesday. The U.S. dollar has rebounded substantially after hitting a three-month low at C$1.0109 when Statistics Canada reported that building permits issuance in Canada increased by 6.5% in June, much higher than the 1.8% increase expected by economists and the 8.2% decline recorded in the previous month. -By Bradley Davis, Dow Jones Newswires; 212-416-2654;

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