LONDON, Jan 31: The dollar gained on the euro on Thursday, recovering ground after more weak US economic data and another substantial cut in US interest rates, dealers said.

They said the dollar was hit earlier after a sharp spike in US jobless claims compounded news on Wednesday of a dramatic slowdown in fourth quarter growth to 0.6 per cent from 4.9 per cent in the third, pointing to more problems.

At the same time, the dollar retained enough of its safe haven status to attract fresh funds at the lows and in the longer-term, current levels may look a good buy opportunity, they said.

In late European trade, the euro was at $1.4831, off the high of $1.4914 and not far from the record $1.4967 on November 23 and compared with $1.4861 in New York late Wednesday.

The dollar was firmer at 106.63 yen from 106.24 yen.

“The jump in initial jobless claims could be indicating that the economy is headed for a recession after all,” said Paul Ashworth at Capital Economics.

Forecasts are for 58,000 new jobs in January, up from a meagre 18,000 rise in December, but there are some concerns the outcome due Friday could prove weaker.—AFP