RTTNews - The euro rose modestly against the dollar and yen on Thursday in New York as stocks in the U.S and Europe posted moderate gains, adding to risk appetite. Meanwhile, the European currency continued its downward spiral against the sterling.

The common currency has struggled to find direction throughout much of June against the dollar as investors ponder what the Federal Reserve will do next. The euro had seen sharp gains in May as traders showed much more confidence in higher-yielding currencies amid hopes the economy is headed to better days.

Also on Thursday, the European Central Bank said weakness in housing market activity, demand and supply dynamics suggest that house price growth may moderate further in the euro area.

The euro saw modest strength against the greenback, touching above 1.4100 in mid-day trading. The single currency remained uncertain since climbing away from a near-term low of 1.3804 earlier in the week, which came after the euro hit a multi-month high of 1.4338 last week.

The U.S. Labor Department revealed that initial jobless claims came in at 601,000 for the week ended at June 6. And a Commerce Department report showed that retail sales rose 0.5 percent in May following a revised 0.2 percent decrease in April.

The European currency extended a 6 1/2 month low against the sterling to 0.8499. The euro has been trending sharply lower since reaching a near-term high of 0.8866 late last week.

The latest quarterly BoE/GfK NOP Inflation Attitudes Survey released by the Bank of England showed that respondents assessed the current inflation rate at 4% compared with 4.2% in February.

UK's number of house purchase loans increased 16% on a monthly basis to 35,600 in April, the Council of Mortgage Lenders said on Thursday.

The euro was also slightly higher against the yen, moving near 137.80. The euro has been range-bound since slipping slightly off of a 7 1/2 month high reached last week.

According to a report from the Ministry of Finance, Japan's economy shrank less than initially reported in the first quarter of 2009. The pace of contraction, however, was still fairly severe. The country's gross domestic product fell a price-adjusted 3.8% on quarter, or 14.2% in annualized terms, revised GDP data released by the Cabinet Office showed.

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