The euro inched higher against the U.S. dollar Thursday. | Learn Forex | GoLearnForex.com

The euro inched higher against the U.S. dollar Thursday in Asian trade, but remained close to recent lows amid concerns about a worsening sovereign debt crisis in the euro zone.

The euro had inched slightly higher against the dollar, bouncing a touch from the new one-year low Wednesday following the Fed's commitment to keep interest rates low. At 0615 GMT, the euro was at USD1.3213 against the dollar, from USD1.3203 in late New York trade Wednesday, after having fallen as low as USD1.3114 after the Spanish downgrade.

The Japanese yen weakened against the US dollar despite positive economic news on hopes of the IMF propping up debt ridden Greece with more funding than initially stated. Government data from Japan showed retail sales rose for the third straight month in March to 4.7%.

The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, was at 82.254 from 82.292 late Wednesday.

The Pound weakness continued on the back of concerns that the Sovereign Debt Contagion in Europe will hit the UK eventually as well. Adding to the uncertainty were further polls suggesting a hung parliament after the upcoming elections
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The Australian dollar edged higher in Asia on Thursday helped by some easing of worries around Greece's debt crisis and views Australia's central bank will again raise interest rates when it meets next week.

Analysts said there's still a significant chance that the single currency will soon tumble past the one-year low of USD1.3114, which was reached Wednesday in the wake of Standard & Poor's downgrade of Spain's long-term debt.

Now that the Fed's statement is out of the way, currency investors will again focus squarely on the sovereign-debt crisis that threatens to engulf the euro zone, analysts said.

The pound is likely to trade with risks skewed lower against the dollar. The pair is undermined by continued concerns over the weak U.K. fiscal situation, plus the prospect of a hung U.K. parliament after the May 6 general elections. The euro-pound pair is likely to consolidate in a narrow range.

European stocks are expected to open a little higher Thursday, with a positive close on Wall Street offering support after the U.S. Federal Reserve maintained its easy-money stance at its monthly meeting. Still, overall sentiment remains one of caution given the euro zone's ongoing sovereign debt crisis saga.

Japanese markets were closed Thursday for the Showa Day Holiday, and will remain closed Monday-Wednesday next week for local holidays. This should keep the yen within recent ranges, especially after the U.S. Federal Reserve maintained its easy-money stance Wednesday, saying it would keep interest rates near zero for an "extended period."