Dollar mixed as economic data worsens worldwide

The dollar was mixed Thursday after Federal Reserve Chairman Ben Bernanke repeated a pledge to keep interest rates low to help strengthen the economy, while the euro briefly fell below $1.35 on worries about economic growth in the U.S. and Europe as well as European debt problems.

Initial claims for U.S. unemployment benefits unexpectedly rose last week while measures of economic sentiment in Europe and business investment in Britain declined.

In late trading in New York, the 16-nation euro edged up to $1.3545 from $1.3528 late Wednesday. Before Bernanke spoke during semiannual testimony before Congress, the euro traded as low as $1.3452. That's just shy of a 9-month low of $1.3444 hit on Feb. 19.

Just last November, the euro traded above $1.51 before worries over debt loads in Greece and other European countries began to roil bond markets.

Meanwhile, the British pound fell to $1.5246 from $1.5398 after hitting its lowest point since May 2009 at $1.5191 earlier in the day.

Bernanke told lawmakers the central bank is looking into the use by Goldman Sachs and other Wall Street firms of high-risk financial instruments to make bets that Greece would default on its debt. He also repeated a message he delivered Wednesday that record low interest rates are still needed to make sure that the budding economic recovery is lasting and to help relieve high unemployment.

Keeping rates low can weigh on the dollar as investors seek higher returns in other markets.

The European Commission said Thursday that economic sentiment in the 16 countries that use the euro deteriorated in February for the first time in nearly a year. In the U.K., meanwhile, business investment dropped 5.8 percent in the fourth quarter, raising concerns about a "double dip" in British economic growth, said analysts from Brown Brothers Harriman in a research note.

Meanwhile, credit ratings agency Moody's seconded a warning from Standard & Poor's, saying it could also cut its credit rating on Greece within a month if the heavily indebted country doesn't follow through with its deficit cuts.

The dollar fell to 89.13 Japanese yen from 90.15 yen as investors also flocked to the low-yielding yen's perceived safety — but was up broadly against Asian currencies, currencies in the Nordic countries, and currencies in countries that are big exporters of commodities, such as the Australian, New Zealand and Canadian dollars, as well as the Brazilian real.

Big exporters tend to drop on weaker-than-expected economic news, as a slide back into recession or a weak recovery means companies and consumers need less energy, steel and other raw goods.

The economic recovery is a concern in the U.S. as long as jobs remain scarce. The government said on Thursday that new claims for unemployment aid rose 22,000 to a seasonally adjusted 496,000. The four-week average, which smooths out week-to-week fluctuations, has risen by about 30,000 in the past weeks. The Federal Reserve has said it expects the unemployment rate to average from 9.5 percent to 9.7 percent this year.

Meanwhile, the Commerce Department had mixed news about manufacturing. Durable goods orders rose 3 percent in January because of a jump in commercial aircraft orders. It was the biggest increase in six months for orders of goods that are expected to last at least three years.

However, orders fell by 0.6 excluding volatile transportation orders. Economists expected those orders to rise 1 percent.

In other late trading in New York, the dollar slipped to 1.0804 Swiss francs from 1.0817 francs, but climbed to 1.0626 Canadian dollars from 1.0553 Canadian dollars late Wednesday.