By William L. Watts, MarketWatch
NEW YORK (MarketWatch) — The dollar rose modestly on Thursday, buoyed by jitters over the so-called U.S. fiscal cliff and Europe’s debt crisis, while the euro sank to a two-month low.
The ICE dollar index DXY +0.07% , a measure of the U.S. unit against a basket of six major rivals, rose to 80.868 in morning trade from 80.781 in North American trade late Wednesday.
The index pared gains after data showed a decline in weekly jobless claims and a narrowing in the trade deficit in September.
U.S. stocks edge higher on Thursday after tumbling in the previous session, in part due to worries over whether lawmakers will manage to avert a combination of major spending cuts and tax hikes set to take effect on Jan. 1, potentially taking the economy back into recession.
The euro EURUSD -0.3353% remained under pressure, falling to $1.2742 from $1.2769 on Wednesday.
The shared currency traded as low as $1.2719, according to FactSet, its lowest intraday level since Sept. 7.
The euro saw some support in Asian trade after Greece’s parliament narrowly passed a 13.5 billion-euro ($17.24 billion) package of additional austerity measures in the face of violent public protests. The measures are seen as a prerequisite for a further round of aid previously agreed by the country’s lenders.
It’s clear “that there are still major problems in Greece reaching a solvent situation. It is consequently hard to get too positive about the euro, but the bad news should be largely in the market,” wrote strategists at Lloyds Bank in London.
The European Central Bank left interest rates unchanged, as expected on Thursday.
At his news conference, ECB President Mario Draghi said the institution stands ready to implement its aggressive bond-buying program, known as outright monetary transactions, or OMTs, but it remains up to Spain or other governments to decide whether to seek help. Read: Focus on Draghi as ECB keeps rates unchanged.
The British pound GBPUSD -0.0654% fell to $1.5981 from $1.6004. The Bank of England kept its monetary policy unchanged on Thursday.
Against the Japanese yen USDJPY -0.2254% , the dollar bought ¥79.91 in recent action, down from ¥79.98 on Wednesday.
The Australian dollar AUDUSD +0.0574% traded at $1.0421, nearly unchanged from $1.0419.
William L. Watts is MarketWatch's European bureau chief, based in Frankfurt.
