NEW YORK (MarketWatch) -- The dollar rose by the most in a month on Thursday amid signs of increasing tensions within Europe over an aid plan for the debt-strapped Greek government.

The dollar also received support from some discussion in the market about the possibility that the Federal Reserve will raise the discount rate sooner than previously slated.

The euro declined to $1.3620 from $1.3735 in North American trade late Wednesday. The euro slipped 0.9% versus the Japanese currency to 122.95 yen.

The dollar index DXY, -0.24% , which measures the U.S. unit against a trade-weighted basket of six major currencies, rose to 80.228, up from 79.734 -- the biggest increase in a month. Still, on Wednesday, the index closed at the lowest level in a month.

The dollar bought 90.30 Japanese yen, little changed from Wednesday.

Recent gains in the U.S. dollar stem from "dealer talk of Fed hike in the discount rate," said Ashraf Laidi, chief market strategist at CMC Markets, in emailed comments Thursday.

Federal Reserve has not made any announcement Thursday about the discount rate, which is the rate at which banks can borrow directly from the Fed during emergencies. Fed officials have said before that adjustments in the discount rate are intended to normalize the Fed's lending facilities and are not an indication of change in monetary policy.

The Federal Reserve has said it wants to get the discount rate, now at 0.75%, back to its pre-crisis level, which has historically been 1% above the target fed funds rate, the more closely followed policy measure that affects a wider array of consumer borrowing costs.

The last statement from the Federal Open Market Committee this week signaled policy makers don't think the economy can tolerate higher rates right now.

It's unlikely that the Fed would adjust the discount rate without clearly preparing the market for it first, like it did when it first raised the discount rate a month ago, said Win Thin, a strategist at Brown Brothers Harriman.

"Because in the current environment and without preparation, a discount rate hike would be potentially be destabilizing, we suspect the Fed will not do it," Thin said.

Greece, IMF

The dollar also got a boost versus the euro midday after a spokeswoman for the International Monetary Fund said Greece hadn't approached the IMF for financing, but the fund remains ready to help if needed, according to Dow Jones Newswires.

"Recent wire headlines noting IMF presence in Greece prompted some initial euro selling," said strategists at Action Economics.

"Worries related to stress points around the relationship between Greece and Germany and the potential effect on any bailout plan is touching the markets," said John Stoltzfus, a senior market strategist at Ticonderoga Securities.

"The euro weakened against the dollar and the yen, and some risk aversion came back into the system that has the risk-recovery trade unwinding," he said.

A senior Greek official earlier told Dow Jones Newswires that the prospect of help from the European Union "doesn't look good" and that Greece could seek IMF help over the April 2-4 weekend if a more detailed aid plan isn't produced at an E.U. summit on March 25-26.

The report comes amid signs Germany and other euro-zone countries are moving more in favor of an IMF role in providing any needed aid to Greece amid public opposition to a taxpayer funded bailout for a euro-zone partner. Read about Greek debt concerns.

Greek Prime Minister George Papandreou told reporters in Brussels that Greece would prefer E.U. measures but that the International Monetary Fund remained an option.

"Investor sentiment was hit by the political divisiveness over whether and how to help Greece with loans or guarantees," said Ken Jaques, credit and derivatives manager at Informa. "Markets are unnerved not only by the lack of clarity about Greece's future but also by European leaders' inability to find common ground on basic economic policy -- France this week criticized Germany for running a trade surplus, which drives its trading partners, like Greece, to suffer deficits."

The dollar showed little reaction to a pair of U.S. reports showing weekly jobless claims fell and an index of consumer prices was unchanged in February. Read about jobless claims.Read about CPI.