Euro slides back to one-month trough as ECB says Greek default risks 'increased sharply'

On Thursday the euro slid back to the one-month low as hopes for a close deal between Greece and creditors faded after ECB warning.

The dollar was still stronger against peers despite fresh downbeat numbers.

EUR/USD was last at 1.0884, losing 0.19%.

The single currency recovered after the Greek government said on Wednesday it had started drafting an agreement with its international partners, meaning there is a progress in long-running negotiations to unlock more financial aid.

However, some European officials said there still are several issues to address in the talks before an agreement could be reached.

The European Central Bank cautioned in its latest financial stability report published Thursday that default risk expectations have “increased sharply in Greece” amid heightened political uncertainty.

Meanwhile, the greenback was supported despite the data showing that U.S. jobless claims rose to four-week highs.

The U.S. Department of Labor reported that the amount of individuals filing for initial jobless benefits in the week ending May 23 rose by 7,000 to 282,000 from the previous week’s total of 275,000.

Meanwhile, analysts had expected initial jobless claims to fall by 5,000 to 270,000 last week.