RTTNews - The euro lingered near its 5-month highs versus the dollar on Thursday in New York, even as falling global stocks left traders apprehensive about investing in higher-yielding currencies. The common currency gave back an early rally versus the pound and traded in a range against the dollar and yen.

The euro held its gains versus the U.S. dollar and touched a new five-month high of 1.3838. The common currency surged yesterday as the dollar fell following comments from Treasury Secretary Timothy Geithner warning of a slow economic recovery.

On the economic front, the Labor Department revealed that initial jobless claims came in at 631,000 for the week ended May 16th. This was down 12,000 from the previous week's revised total of 643,000.

The European currency gave back early gains against the British pound and approached a three-month low again. The euro moved to 0.8750 in mid-day trading, compared to a multi-month low of 0.8721 yesterday.

Earlier, the euro hit as high as 0.8869 against the sterling after Standard & Poor's revised the outlook on the United Kingdom to negative from stable. The rating agency affirmed 'AAA' long-term and 'A-1+' short-term sovereign credit ratings.

The euro edged to the high end of a recent trading range against the yen, moving to 131.20. The pair has been range-bound for about a week.

In the Eurozone, the Markit flash Eurozone composite output index rose to an eight month high of 43.9 in May from 41.1 in April, beating the forecast of 42.

Meanwhile, the flash services purchasing managers' index, or PMI, climbed to 44.7 from 43.8, above the expected figure of 44.5. Further, the manufacturing PMI increased to 40.5 from 36.7 in April, while economists had expected an increase to 38.3.

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