RTTNews - The dollar slumped badly versus the euro and sterling Thursday after the Chinese urged a reformed reserve currency system at the G8 meeting in Italy, threatening the dollar's safe haven status.

While, there was no mention of the greenback in a draft declaration on the international monetary system released Thursday, it was not from lack of trying on the part of the Chinese.

There's a need to improve the international monetary system, enhance the reserve currency and regulating regime, maintain a relative stability of the exchange rates of the main international reserve currencies, and promote a more diversified and reasonable international currency system, Dai Bingguo, China's state councilor, was quoted by Chinese officials as having told the G8.

The dollar dropped to a weekly low versus the euro, slipping to 1.4071 from a 3-week high of 1.3832. Against the sterling, the dollar fell to 1.6339, wiping out nearly a weeks worth of gains and moving away from Wednesday's monthly high of 1.5982.

Versus the yen, the dollar was steady near 93, having edged away from Wednesday's 5-month low of 91.79.

In economic news from the US, first-time claims for unemployment benefits showed a substantial decrease in the week ended July 4th, according to a report released by the Labor Department on Thursday.

Jobless claims fell below the 600,000 level for the first time since January, dropping to 565,000 from the previous week's revised figure of 617,000.

Thursday morning, the Commerce Department released its report on wholesale trade in the month of May, showing that wholesale inventories fell by less than economists had been expecting. The report also showed a modest increase in wholesale sales.

The report showed that wholesale inventories fell 0.8 percent in May following a revised 1.3 percent decrease in April. Economists had expected inventories to fall by 1.0 percent compared to the 1.4 drop originally reported for the previous month.

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