FOREX-Euro drops vs U.S. dollar on Greek pessimism report

* Euro hit by reported Greek comments

* U.S. jobless claims fall; inflation contained

* Philly Fed index rises in March

* Risk demand dwindles, high-risk FX edges lower

(Updates prices, adds new session low on euro)

By Gertrude Chavez-Dreyfuss

NEW YORK, March 18 (Reuters) - The euro weakened against the dollar on Thursday as worries over Greece's debt problems heightened after a report saying the country was not optimistic about aid from euro zone members.

An unidentified Greek official quoted in the report said Greece was increasingly pessimistic about the prospect for receiving assistance at a March 25 European Union summit and may seek International Monetary Fund aid during the April 2-4 Easter weekend.

Greek Finance Minister George Papaconstantinou, however, denied on Wednesday that it may soon turn to the IMF for aid, saying all options for getting support are still open.[ID:nATH005287]

His comments did little to ease negative euro sentiment.

"Three months have elapsed since the last credit downgrade of Greece and (there is) still no credible solution on how it will obtain 56 billion euros to meet its short term debt obligations," said Ashraf Laidi, chief market strategist at CMC Markets in London.

"Meanwhile, the Fed is due to end its purchases of $3.0 trillion in MBS this month, bringing its quantitative easing a step closer to the end. (These) are the factors preventing euro/dollar from regaining the all-important $1.3850 resistance."

Greece, battling with crippling debts, has said it is counting on EU leaders to approve a mechanism to help the country at next week's meeting.

But some countries -- especially Germany, the EU's biggest paymaster -- are wary of making concrete promises and analysts said the Dow Jones Newswires report suggested a rift between Greece and Germany may be deepening. For more see [ID:nSGE62H08W].

The euro fell to session lows against the dollar at $1.3587, according to Reuters data, pulling back from a five-week high hit on Wednesday. It was last at $1.3605, down nearly 1 percent.

"It's noteworthy that we're still (within) ranges and even the euro has bounced off its lows. We have seen it stabilize and the euro is now trading within a band," said Camilla Sutton, senior currency strategist at Scotia Capital in Toronto.

The euro struggled as European shares <.FTEU3> retreated from a 17-month closing high hit on Wednesday, while prices for oil , another risky asset, fell more than 1.0 percent.

The dollar rose 0.8 percent against a basket of currencies to 80.293 <.DXY>. The greenback rose 0.1 percent against the yen at 90.35 and the euro was down 0.8 percent at 123.00 yen.

Data showing a fall in U.S. weekly jobless claims, a rise in a U.S. Mid-Atlantic business index, and tame U.S. inflation spurred modest dollar selling versus the euro on slightly higher risk appetite, but overall markets were cautious and focused on Greece. See WRAPUP [ID:N18215395].

"The numbers came in so close to expectations that I think the market is going to focus primarily on risk sentiment instead," said Michael Malpede, market analyst, at Easy Forex in Chicago. "The Greek concerns and increased tension between the U.S. and China over the yuan are the driving factors."

Against the Canadian dollar the U.S. dollar pulled back from a 20-month low of C$1.0071 on Wednesday to trade at C$1.0134 but analysts see the pair hitting parity in the near term on speculation Canadian interest rates may soon rise. (Additional reporting by Steven C. Johnson; Editing by Andrew Hay)