Worries about Europe's banking sector pushed the euro to a new 15-month low against the dollar Thursday. Bad news from Europe overshadowed better news on the U.S. jobs market.
European financial stocks fell Thursday as investors realized that banks will have trouble trying to raise new capital. Shares of Italy's largest bank, UniCredit, dropped for a second day in a row after it had to offer huge discounts on its stock price Wednesday to attract investors.
Spain's finance minister said in a newspaper interview Thursday that the country's banks need to raise an additional $65 billion. Weaker demand at a bond auction in France also disappointed traders.
The euro fell as low as $1.2775 early Thursday, its lowest point since September 2010. It was trading slightly higher at $1.2782 late Thursday. The euro was worth $1.2938 late Wednesday.
In the U.S., the Labor Department said applications for unemployment benefits dropped to 372,000 last week. The four week average fell to 373,250, the lowest since June 2008, a sign that the U.S. job market may be slowly improving.
The dollar strengthened against most other currencies.
The British pound fell to $1.5483 from $1.5612 late Wednesday. The dollar rose to 77.18 Japanese yen from 76.75 Japanese yen, to 0.9533 Swiss franc from 0.9420 Swiss franc and to 1.0192 Canadian dollar from 1.0133 Canadian dollar.
The dollar was also higher against the Australian and New Zealand dollars, the Norwegian krone, the South Korean won and the Brazilian real.