Forexpros – The U.S. dollar was higher against its major counterparts on Thursday, as concerns over the outlook for global growth and the ongoing sovereign debt crisis in the euro zone supported safe haven demand.

During European afternoon trade, the dollar was higher against the euro, with EUR/USD shedding 0.28% to hit 1.2670.

In the euro zone, data showed that manufacturing activity in the region contracted at the fastest pace since June 2009 this month, with the purchasing managers’ index falling to 44.8, down from a final reading of 45.1 in May.

The euro zone’s services PMI ticked up to 46.8 from 46.7 in May, against expectations for a dip to 46.5, but remained well below the 50 level that separates contraction from expansion.

Manufacturing activity in Germany slowed to the lowest level in three years in June, as the ongoing euro zone crisis hit export demand.

The weak data came after a report showed that China’s HSBC PMI for June fell to 48.1 compared with 48.4 in May, remaining in contraction territory for the eighth straight month.

Investors remained wary ahead of the outcome of an audit of Spanish banks later in the day, amid concerns that the results could show that a EUR100 billion bailout for the country’s banks agreed earlier this month would not be large enough.

Spain’s Treasury sold slightly more than the targeted amount of EUR2 billion at an action of government debt earlier in the session, but the country’s borrowing costs rose sharply.

The average yield on the five-year bond climbed to 6.07%, up from 4.96% at a similar auction last month.

Meanwhile, the greenback remained supported after the Federal Reserve announced Wednesday that it is extending the current bond buying program until the end of the year, disappointing expectations for more aggressive easing measures, following a recent string of weak U.S. data.

The greenback was higher against the pound, with GBP/USD sliding 0.13% to hit 1.5698.

The pound found some support after official data showed that U.K. retail sales rose 1.4% in May, beating expectations for a 1.1% rise, following a 2.4% decline in April.

Elsewhere, the greenback gained ground against the yen and the Swiss franc, with USD/JPY advancing 0.65% to hit 80.05 and USD/CHF up 0.23% to hit 0.9468.

Earlier in the day, a Bank of Japan policymaker said the central bank is prepared to take bold action to support the economy, signaling the possibility of further monetary easing.

The greenback was mixed against its Canadian, Australian and New Zealand counterparts, with USD/CAD dipping 0.02% to hit 1.0179, AUD/USD inching down 0.06% to hit 1.0184 and NZD/USD adding 0.42% to hit 0.7995.

The New Zealand dollar strengthened after official data showed that the country’s economy grew by 1.1% in the three months to March, beating expectations for a 0.5% rise and following a 0.4% expansion the previous quarter.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.20%, to trade at 81.77.

Later Thursday, the U.S. was to produce government data on unemployment claims, followed by preliminary data on manufacturing activity and an industry report on existing home sales. The country was also to release data on manufacturing activity in the Philadelphia area.