Forex - EUR/USD hits 1-week low on renewed Greek fears

Forex Pros – The euro plunged to a 1-week low against the U.S. dollar on Thursday, after debt-laden Greece warned it will be forced to turn to the International Monetary Fund if the EU cannot agree to a bailout plan next week.

EUR/USD plummeted past the 1.36 mark to 1.3586 during U.S. morning trade, its lowest rate since last Wednesday. The pair subsequently consolidated around 1.361, still shedding 0.93%.

The pair was likely to find support at 1.3434, the low of March 2 and a 9-month low, and resistance at 1.4026, the high of Feb. 3.

The single European currency also sank against the yen, with EUR/JPY shedding 0.87% to reach 122.98.

Earlier in the day, Greek Prime Minister George Papandreou said he was not asking for money from EU partners, but a clear mechanism for financial help in case Greece can't afford to borrow from markets.

"That alone would be enough to make sure that the speculators would be warned off," The Associated Press quoted him as saying. "I think it's an opportunity to make a decision next week at the summit."

He added that an EU failure to agree any plan would force Greece to go to the IMF, although hopefully "that will not be necessary," according to the news agency.

Also Thursday, the U.S. Labor Department said initial claims for jobless benefits fell by 5,000 to 457,000 in the week ended Mar. 13. Economists had expected a drop of 7,000.

But a separate government report showed that the U.S. current account deficit widened less than expected to $115.6 billion in the fourth quarter of 2009.