* Euro hit by reported Greek comments
* U.S. jobless claims fall; inflation contained
* Philly Fed index rises in March
* Risk demand dwindles, high-risk FX edges lower (Adds comment, U.S. data)
By Gertrude Chavez-Dreyfuss
NEW YORK, March 18 (Reuters) - The euro weakened againstthe dollar on Thursday as uncertainty over a resolution toGreece"s debt problems heightened after a report saying thecountry was not optimistic about aid from euro zone members.
An unidentified Greek official said Greece was increasinglypessimistic about the prospect for receiving assistance fromthe European Union and may seek aid from the InternationalMonetary Fund, Dow Jones Newswires reported.
Greek Finance Minister George Papaconstantinou described as"ridiculous" the report that Greece may soon turn to the IMFfor support and said all options are still open.[ID:nATH005287]
His comments, however, did little to ease negative eurosentiment.
"Three months have elapsed since the last credit downgradeof Greece and (there is) still no credible solution on how itwill obtain 56 billion euros to meet its short-term debtobligations," said Ashraf Laidi, chief market strategist at CMCMarkets in London.
Also affecting sentiment, he said, was the FederalReserve"s planned end this month of purchases ofmortgage-backed securities, which will bring its quantitativeeasing measures a step closer to the end.
These "are the factors preventing euro/dollar fromregaining the all-important $1.3850 resistance," Laidi said.
Greece, battling with crippling debts, has said it iscounting on EU leaders to approve a mechanism to help thecountry at a European Union summit next week.
But some countries -- especially Germany, the EU"s biggestpaymaster -- are wary of making concrete promises, and analystssaid the Dow Jones Newswires report suggested a rift betweenGreece and Germany may be deepening. For more see[ID:nSGE62H08W].
In midday New York trading, the euro EUR= was down around0.6 percent on the day at $1.3657, pulling back from afive-week high hit on Wednesday.
"It"s noteworthy that we"re still in yesterday"s ranges andeven the euro has bounced off its lows. We have seen itstabilize and the euro is now trading within a band," saidCamilla Sutton, senior currency strategist at Scotia Capital inToronto.
The euro struggled as European equities .FTEU3 fell afterhitting a 17-month closing high on Wednesday, while prices foroil CLC1, another risky asset, fell 0.6 percent on the day.
The euro hit the day"s low at $1.3648 in early Europeantrade, but losses were limited due to suspected demand fromAsian central banks around that level, traders said. Trendlinesupport around $1.3640 also limited losses.
The dollar rose 0.5 percent against a basket of currenciesto 80.073 .DXY. The greenback rose 0.2 percent against theyen at 90.41 yen JPY= and the euro EURJPY=R was down 0.5percent at 123.37 yen.
Data showing a fall in U.S. weekly jobless claims, a risein a U.S. Mid-Atlantic business index, and tame U.S. inflationspurred modest dollar selling versus the euro on slightlyhigher risk appetite, but overall markets were cautious. SeeWRAPUP [ID:N18215395].
"The numbers came in so close to expectations that I thinkthe market is going to focus primarily on risk sentimentinstead," said Michael Malpede, market analyst, at Easy Forexin Chicago. "The Greek concerns and increased tension betweenthe U.S. and China over the yuan are the driving factors."
Against the Canadian dollar CAD=D4 the U.S. dollar pulledback from a 20-month low of C$1.0071 on Wednesday to trade atC$1.0124 but analysts see the pair hitting parity in the nearterm on speculation Canadian interest rates may soon rise. (Additional reporting by Steven C. Johnson; Editing by LeslieAdler)
Currencies
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