Dollar gains for 2nd day, shrugs off record U.S. jobless claims

Credit: REUTERS/THOMAS WHITE

By Gertrude Chavez-Dreyfuss

NEW YORK, April 2 (Reuters) - The dollar rose for a second straight day against a basket of currencies on Thursday as investors, worried about the prospect of a global recession, continued to take shelter in the greenback.

"With the increase in the coronavirus impact around the world, investors are looking at the dollar as a safe haven," said Chris Gaffney, president of World Markets, TIAA Bank in St. Louis, Missouri.

U.S. jobless claims in the latest week soared to a record level, yet the dollar's reaction was tepid at most.

Data showed initial claims for unemployment benefits rose to 6.65 million in the latest week from an unrevised 3.3 million the previous week. The figures far exceeded the median estimate of 3.50 million in a Reuters survey of economists.

"The order of magnitude of this data is so colossal compared to expectations that there's really no datum to work out what the story is," said Richard Benson, co-chief investment officer at Millennium Global Investments in London.

"It's just very, very bad. So I am not sure the market is going to trade on data surprises from that mix."

Markets have been alarmed since U.S. President Donald Trump's warning on Tuesday of a painful two weeks ahead in fighting the coronavirus, even with strict social distancing measures.

The United States has over 200,000 confirmed COVID-19 cases - the most worldwide - which has sent investors flocking to safe-haven assets.

Some analysts do not expect the dollar to extend its recent rally after the Federal Reserve took a series of measures, which have begun to have an impact, to ensure an adequate global supply of the currency.

The cost of raising U.S. dollar funds in the yen and euro swaps market stabilized on Thursday, with premiums favoring the other currencies, suggesting that greenback demand had receded from earlier in the coronavirus pandemic EURCBS3M=ICAP, JPYCBS3M=ICAP.

In early afternoon trading, the dollar index was up 0.8% at 100.35 =USD.

Against the yen, the dollar rose 0.7% at 107.91 yen JPY=EBS.

The euro extended its decline, falling 1.2% to $1.0828, after hitting a one-week low EUR=EBS.

The Fed's efforts to improve dollar liquidity have boosted other currencies such as the Norwegian crown, which advanced further on Thursday to a three-week high of 11.1820 against the euro. It was last trading up 2% at 11.24 EURNOK=D3.

To combat the economic slowdown from the pandemic, the Fed said on Wednesday it was temporarily easing its leverage rules for large banks by exempting certain investments from a key leverage calculation.

========================================================

Currency bid prices at 1:59PM (1759 GMT)

Description

RIC

Last

U.S. Close Previous Session

Pct Change

YTD Pct Change

High Bid

Low Bid

Euro/Dollar

EUR=

$1.0827

$1.0962

-1.23%

-3.42%

+1.0968

+1.0827

Dollar/Yen

JPY=

107.9100

107.1500

+0.71%

-0.87%

+108.0900

+107.0300

Euro/Yen

EURJPY=

116.85

117.48

-0.54%

-4.18%

+117.7200

+116.3600

Dollar/Swiss

CHF=

0.9743

0.9654

+0.92%

+0.67%

+0.9746

+0.9651

Sterling/Dollar

GBP=

1.2365

1.2376

-0.09%

-6.74%

+1.2474

+1.2351

Dollar/Canadian

CAD=

1.4193

1.4188

+0.04%

+9.29%

+1.4298

+1.4081

Australian/Dollar

AUD=

0.6035

0.6070

-0.58%

-14.02%

+0.6119

+0.6008

Euro/Swiss

EURCHF=

1.0552

1.0582

-0.28%

-2.76%

+1.0594

+1.0547

Euro/Sterling

EURGBP=

0.8756

0.8858

-1.15%

+3.57%

+0.8861

+0.8757

NZ Dollar/Dollar

NZD=

0.5900

0.5905

-0.08%

-12.41%

+0.5973

+0.5882

Dollar/Norway

NOK=

10.4217

10.4310

-0.09%

+18.72%

+10.4866

+10.2252

Euro/Norway

EURNOK=

11.2950

11.4640

-1.47%

+14.81%

+11.4785

+11.1648

Dollar/Sweden

SEK=

10.1430

9.9826

-0.23%

+8.51%

+10.1569

+9.9849

Euro/Sweden

EURSEK=

10.9836

11.0085

-0.23%

+4.91%

+11.0163

+10.9102

(Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Olga Cotaga in London; Editing by Alistair Bell and Richard Chang)

((gertrude.chavez@thomsonreuters.com; 646-223-6322; Reuters Messaging: gertrude.chavez.reuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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