The U.S. dollar rose against the Japanese yen and most other currencies Thursday, as a smaller-than-expected downward revision to fourth-quarter U.S. GDP boosted sentiment. The dollar index a measure of the greenback versus a basket of major currencies, traded at 83.90, compared with 83.712 in North American trade late Wednesday. The dollar rose 0.8% to 98.30 Japanese yen in recent trading. U.S. real gross domestic product plunged at a 6.3% annualized seasonally adjusted rate in the fourth quarter, the Commerce Department reported Thursday in its third estimate of quarterly growth. GDP hadn't fallen so much since the first quarter of 1982. It was the third largest decline in GDP in 50 years. However, the downward revision to a 6.3% drop was smaller than the 6.7% decline expected by economists surveyed by MarketWatch. A month ago, the government agency said the economy fell at a 6.2% annual rate. See Economic Report. "Despite the doom and gloom outlook by some economists and the pessimistic feel on Main Street, recent economic data has not been as weak as everyone expected," said Kathy Lien, director of currency research at GFT. "Currency traders shrugged off the underlying weakness because the GDP report is backward looking," Lien said. "The smaller revision provides relief but investors are still cautious about believing in a recovery." Separate data showed ongoing weakness in the U.S. labor market. The number of people collecting state unemployment benefits has reached yet another new record, jumping 122,000 to a seasonally adjusted 5.56 million in the week ended March 14, the Labor Department reported Thursday. Read more. Wild swings The greenback made wild swings the previous day as traders reacted to remarks by U.S. Treasury Secretary Timothy Geithner on the dollar's status as the world's premier reserve currency. See full story on Geithner. The dollar sold off sharply early Wednesday after Geithner made remarks that were taken as a signal that the Obama administration was open to looking at a Chinese proposal to reduce the dollar's role. The dollar soon recovered after Geithner clarified that he believed the greenback should remain the world's reserve currency, but traders remained disposed toward selling the greenback in Asian trade Thursday, said Michael Woolfolk, a currency strategist at Bank of New York Mellon. The euro edged down 0.1% to $1.3561 on Thursday, down slightly from $1.3580. The single currency lost ground after data from the European Central Bank showed a further deceleration in private-sector lending. Loans rose 4.2% in February compared to the same month a year ago, slowing from an annual pace of 5% in January. The pace of household and corporate lending growth both continued to ease. "It took a while, but now the lending slowdown has become extremely evident and seems to be gathering momentum," said Marco Valli, an economist at UniCredit MIB. "Against this background, pressure on the ECB to adopt further unconventional policy measures in order to encourage banks to lend more is likely to continue to grow," wrote Ben May, an economist at Capital Economics. The British pound traded at $1.4533 versus the dollar, compared with $1.4538 late Wednesday. Sterling slumped Wednesday following the failure of the British government's failed auction of 40-year gilts. See full story. Weighing on sterling Thursday was data showing a much sharper-than-expected drop in February U.K. retail sales. Retail sales volume fell 1.9% in February, for a 0.4% rise compared to the level seen in the same month last year, the Office for National Statistics reported Thursday. The year-on-year figure marked the slowest rate of growth since September 1995. A Dow Jones Newswires survey of economists had forecast a 0.4% monthly decline and a 2.5% year-on-year rise.

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