LONDON, Jan 22: The dollar was firmer against the euro but fell against the yen to multi-year lows as the market was whiplashed by a series of very weak US and Asian economic data.

Dealers said that if the dollar had enjoyed some safe haven buying on Wednesday, US jobless claims at a 26-year high and housing starts at a near 50 year low on Thursday must have caused second thoughts about the US outlook.

At the same time, confidence in the euro was fragile, with the latest downturn in the banks undercutting hopes that the financial crisis can be resolved quickly.

The yen rose sharply despite a torrent of bad Japanese economic and corporate news, including a central bank warning that the country faces a deep, two-year recession.

In late London trade, the euro was at $1.2964, down from $1.3022 late Wednesday in New York.

The dollar fell to 88.71 yen from 89.45 yen

The pound continued under heavy pressure, tumbling to $1.3739 from $1.3957 on concerns the government will ultimately have to nationalise the banking system to save it from collapse.—AFP