New York:  The euro fell for a currency strategist sixth straight day against the dollar after data showing Greece's budget shortfall last year was worse than forecast raised the prospect that the nation will be forced to activate a rescue plan.

Europe's currency weakened against 13 of its 16 most-traded peers as statistics from the European Union showed Greece's deficit was 13.6 per cent last year, higher than the government's April forecast of 12.9 per cent. The dollar pared its loss against the yen as reports showed US producer prices increased in March more than economists forecast and initial jobless claims decreased last week.

"It really looks like we are coming very close to the point where Greece asks for aid and triggers the EU bailout, and the euro is suffering," said Lutz Karpowitz, a currency strategist at Commerzbank in Frankfurt. "The figures show it's even worse than expected and not even the worst in the euro zone. The consolidation process will be even harder, and this is the reason behind euro weakness."

The euro dropped 0.5 per cent to $1.3322 in New York, from $1.3390 on Wednesday, and traded at 123.95 yen, compared with 124.77 yen. The Japanese currency was at 93.07 per dollar, compared with 93.19 Wednesday.

Europe's single currency has weakened 6.8 per cent against the dollar this year on concern Greece's difficulty in containing its budget deficit will spread. Ireland overtook the southern European nation as the EU member with the largest deficit, at 14.3 per cent.

Goldman Sachs Group's chief European economist, Erik F. Nielsen, said Greek Prime Minister George Papandreou's government is likely to cut or delay payments to bond investors even as the country negotiates the terms of a rescue package. The nation's 10-year bonds fell for an eighth day.

"Greek bond and credit-default swaps spreads remain elevated, and those of Portugal are rising in sympathy," Gareth Berry, a currency strategist at UBS AG in Singapore, said Wednesday in a research note. "Given the apparent lack of urgency in finalising the details of the bailout plan, we see troubled times ahead for the euro."

President Barack Obama was to speak later yesterday at New York's Cooper Union, where he was to take aim at "risky decisions" made on Wall Street.