Greenspan, who has led the US central bank for more than 18 years, told the Congress that the current financial crisis is a "once-in-a-century credit tsunami," and warned US unemployment would rise further.

"Given the financial damage to date, I cannot see how we can avoid a significant rise in layoffs and unemployment," Greenspan said.

Greenspan said that a necessary condition for the crisis to end would be stabilization in home prices, which would not happen in many months in the future. He said the recently approved US$700 billion bailout package could serve the need and its impact was already being felt in markets.

White House spokeswoman Dana Perino agreed with Greenspan's forecast about unemployment, saying US GDP numbers for the final two quarters of this year would be tough.

The US Department of Labor reported that initial filings for jobless benefits increased last week by 15,000 to a seasonally adjusted 478,000, higher than expected.

The economy is in a recession and the job market will continue to worsen, analysts said.

On Thursday, the dollar continued rising against the euro and the pound. The euro bought 1.2852 dollars in late New York trading compared with 1.2866 dollars it bought late Wednesday. The pound fell to 1.6124 dollars from 1.6337 dollars.

The dollar also dipped to 1.1598 Swiss francs from 1.1599, and to 96.05 Japanese yen from 97.97. It rose to 1.2598 Canadian dollars from 1.2521 though.