US Dollar hammering continues as global sell off and decaying economy takes toll

The dollar dropped after economic indicators pointed to a dismal employment picture and slowing economic growth.

First-time claims for unemployment benefits jumped 25,000 to 429,000, indicating employers might have slowed their hiring recently. Economists were expecting claims to fall to 395,000.

At the same time, gross domestic product rose at a modest 1.8% pace in the first quarter, matching economists' forecasts. However, the pace of expansion is much weaker than it was at the end of 2010, when the economy was growing at 3.1% pace.

"Overall this suggests that the U.S. economy is slowing down a bit and that could potentially weigh on the dollar going forward," said Brown Brothers Harriman strategist Mark McCormick.

The euro was at $1.4827 from about $1.4794 late Wednesday. The dollar was at ¥81.48, from ¥82.04.

The dollar has been hammered recently, losing out on interest-rate differentials and regularly hitting multiyear lows against other major currencies. Losses were especially bad Wednesday after Federal Reserve Chairman Ben Bernanke indicated the central bank is far from tightening monetary policy as economic growth remains slow and unemployment remains high. (read more)