NEW YORK - The dollar plunged to a fresh record low against the euro Thursday amid more glum US economic news and downbeat comments on the outlook from Federal Reserve chairman Ben Bernanke.
The single European currency jumped to an all-time high of 1.5229 dollars at one point Thursday. The euro at 2200 GMT was buying 1.5197 dollars, against 1.5119 late Wednesday.
The euro broke through the symbolic 1.50-dollar barrier on Tuesday for the first time since its creation in 1999 and topped 1.52 dollars for the first time Thursday.
The greenback also sank against the other major currencies, nearing the level of 105 yen.
The US currency remained under pressure as Bernanke testified in Congress for a second day on the central bank's semiannual economic report.
The Fed chief, who gave strong hints of more rate cuts by the central bank, said the US economy faces a different and more complex set of issues than the recession in 2001.
"We are facing a situation where we have simultaneously a slowdown in the economy, stress in the financial markets and inflation pressure coming from these commodity prices abroad," Bernanke said.
"Each of those things represents a challenge. We have to make our policy in trying to balance these different risks in a way that will get the best possible outcome for the American economy."
Analysts said the comments highlighted problems facing the US economy.
"The broader story is that the dollar remains under heavy pressure because of the Federal Reserve's decision to cut US interest rates aggressively, even as many of the major foreign central banks continue to resist cutting their rates," said Patrick Fearon, economist at AG Edwards.
"Given the dollar's negative near-term fundamentals, we expect it to keep falling for a while yet."
But Fearon said the greenback is getting oversold, "and we continue to believe that the dollar could rally temporarily at some point in 2008 if the aggressive monetary and fiscal stimulus policies being put into place in the United States start to boost the US financial markets or slowing economic growth finally prompts substantial rate cuts abroad."
The US government meanwhile reported that the economy expanded at a sluggish 0.6 percent annual pace in the fourth quarter.
Analysts had expected a slight upward revision to 0.8 percent for the quarter, which remains the weakest since late 2002.
In a separate report, the Labor Department said new claims for unemployment benefits in the week to February 23 rose by 19,000 to 373,000, signalling a softer job market and potentially weaker conditions overall.
"With initial jobless claims getting closer to the 400,000 a week mark, the odds clearly favor a recession at some point in the first half," said Paul Ashworth, a senior economist at Capital Economics.
Michael Woolfolk at Bank of New York Mellon said he sees little hope for a dollar rebound.
"Players will be looking for further opportunities to sell the dollar in an effort to map out the new trading ranges for the majors," he said.
"While fair value for the euro remain sub-1.45, it is unlikely to see this level until one of two things happens: clear signs that the US economic recovery is in place or clear signs that the ECB (European Central Bank) is prepared to cut interest rates. At this point, both seem out of the question until at least mid-year."
In late New York trade, the dollar stood at 105.30 yen from 106.45 Wednesday and 1.0512 Swiss francs after 1.0630.
The pound climbed to 1.9899 dollars from 1.9815.
burs/rl/jjc

02/28/2008 22:20 GMT