* Euro retains selling bias, falls 1 pct vs dollar
* Aussie dollar hit on risk aversion, position liquidation
* U.S. initial jobless claims add to investor caution
(Recasts, adds comment, byline, updates prices)
By Gertrude Chavez-Dreyfuss
NEW YORK, May 20 (Reuters) - The euro on Thursday fell to
its lowest against the yen since November 2001 as investors
fretted about a seeming lack of unity among euro zone leaders
in addressing the region's debt crisis.
Worries about the euro zone spooked investors in global
stock and commodity markets as well, fueling a surge in the yen
and U.S. dollar as safe havens. There was a flight from
currencies that benefit from increased risk appetite such as
the Australian, Canadian, and New Zealand dollars.
"Every European Union member has a central banker and a
finance minister and all are opening their mouths. But
unfortunately, there is no coordinated response to this crisis
and this has hurt the euro," said Ron Simpson, director of
currency research at Action Economics in Tampa, Florida.
The discord has been most apparent the last two days when
German Chancellor Angela Merkel said on Wednesday that the euro
is in danger. "Every one of us here can tell that the currency
crisis in the euro is the greatest challenge that Europe has
faced (in) decades," Merkel said. [].
That was a statement that didn't sit well with French
Economy Minister Christine Lagarde, who said on Thursday she
does not agree with Merkel's view. "I absolutely do not think
the euro is in danger, The euro is a solid and credible
currency." [].
Japan and the United States have economic problems of their
own. But their relatively stable financial systems make the
dollar and yen attractive to investors fleeing risk in Europe.
In early afternoon trading, the euro <EUR=EBS> rose 0.5
percent at $1.2490, touching session peaks at $1.2511 on EBS
trading platform and intra-day lows at $1.2296.
A trader said there was a large euro order in the afternoon
session of more than $400 million at $1.2440, which propelled
the single currency higher. Markets then took out stop losses
after the $1.2440 level was hit.
INTERVENTION UNLIKELY?
The euro had recovered from four-year lows on Wednesday as
traders covered short positions on speculation European
monetary officials might act to check its rapid fall. For now,
market players see intervention unlikely.
Eurogroup Chairman Jean-Claude Juncker said on Thursday he
did not see a need to take immediate action to halt the euro's
decline []. This was echoed by European Union
Competition Commissioner Joaquin Almunia who said there was no
need to intervene. []
Action Economics' Simpson said despite concerns about the
euro, the single currency was able to hold above $1.2300 and
this he attributed to a less upbeat view on the U.S. economy.
In fact, data showed on Thursday that the number of U.S.
workers filing new applications for unemployment insurance
unexpectedly rose last week for the first time since early
April. []. The report added to the market's risk
aversion.
"U.S. economic data has not been as good as those in the
first quarter. That kind of kept the dollar under pressure
which is probably the reason why euro/dollar didn't collapse to
test the trend lows from (Wednesday)," said Action's Simpson.
The dollar was down around 1.9 percent against the yen
<JPY=> at 89.88 yen. The low-yielding Japanese currency also
surged against the euro <EURJPY=R>, which plunged 1.4 percent
to 112.30. At one point, the euro slipped to the lowest against
the yen since November, 2001, according to Reuters data.
In other European news, the euro got a bid after Swiss
National Bank Vice Chairman Thomas Jordan said Switzerland can
cope with a stronger currency in the longer term though the SNB
is for now countering an excessive rise in the franc to prevent
deflation risks. []
The euro <EURCHF=> last traded at 1.4369 Swiss francs, up
0.6 percent on the day.
The Australian dollar came under further heavy selling
pressure versus the U.S. dollar and the yen in particular.
The Aussie <AUD=>, traded down around 2.7 percent versus
the U.S. dollar at US$0.8248 after falling to a ninth-month low
at US$0.8153.
(Reporting by Gertrude Chavez-Dreyfuss; Editing by Andrew
Hay)
