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Dollar drops as U.S. jobless claims surge

The dollar dropped to a one-week low against a basket of currencies on Thursday after data showed an unprecedented surge in Americans filing for unemployment benefits, as businesses across the country shut down in an attempt to stem the spread of the coronavirus.
The number of Americans filing claims for unemployment benefits shot to record of more than 3 million last week.
The jobless blowout was announced shortly after Federal Reserve Chairman Jerome Powell said that the U.S. economy “may well be in recession” but progress in controlling the spread of the coronavirus will dictate when the economy can fully reopen. His remarks were an unusual acknowledgement by a Fed chair that the economy may be contracting even before data confirms it.
“The number has sent chills through the markets. If these numbers continue for three or four weeks, there will be demand for more fiscal support,” and even more monetary support from the Fed, said Quincy Krosby, chief market strategist at Prudential Financial in Newark, New Jersey.
The dollar index fell to 99.92, the lowest since March 18.
The euro gained to $1.0972, up 0.85% on the day and the highest since March 18.
The greenback dipped 1.53% against the Japanese yen to 109.49 yen.
The Australian dollar jumped 1.31% to $0.6036.
The U.S. Senate on Wednesday unanimously backed a $2 trillion bill aimed at helping unemployed workers and industries hurt by the coronavirus epidemic, as well as providing billions of dollars to buy urgently needed medical equipment.
The Federal Reserve last week launched new bond purchase and lending programs in an attempt to ease market logjams. It also committed to swapping dollars for foreign currencies with other major central banks after a desperate scramble for the currency last week sent the dollar to three year highs against the euro, 35-year highs against sterling and 17-year highs against the Australian dollar.
“Although the latest Fed measures have helped calm markets, as long as the Covid-19 crisis continues and the world economy is effectively in lockdown, we would expect markets to remain in turmoil,” foreign exchange analysts at Bank of America said in a report on Thursday.
    
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    Currency bid prices at 9:23AM (1323 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.0972        $1.0880     +0.85%         -2.12%      +1.0990     +1.0872
 Dollar/Yen       JPY=        109.4900       111.1900    -1.53%         +0.58%      +111.3000   +109.3900
 Euro/Yen         EURJPY=     120.15         121.00      -0.70%         -1.48%      +121.0800   +119.9700
 Dollar/Swiss     CHF=        0.9684         0.9767      -0.85%         +0.06%      +0.9777     +0.9678
 Sterling/Dollar  GBP=        1.2012         1.1885      +1.07%         -9.40%      +1.2031     +1.1778
 Dollar/Canadian  CAD=        1.4073         1.4190      -0.82%         +8.37%      +1.4275     +1.4069
 Australian/Doll  AUD=        0.6036         0.5958      +1.31%         -14.03%     +0.6056     +0.5871
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.0630         1.0628      +0.02%         -2.05%      +1.0653     +1.0619
 Euro/Sterling    EURGBP=     0.9132         0.9150      -0.20%         +8.02%      +0.9239     +0.9130
 NZ               NZD=        0.5913         0.5848      +1.11%         -12.22%     +0.5932     +0.5779
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        10.4901        10.7480     -2.40%         +19.50%     +10.8276    +10.4780
 Euro/Norway      EURNOK=     11.5130        11.6970     -1.57%         +17.01%     +11.8276    +11.5036
 Dollar/Sweden    SEK=        10.0325        10.0749     +0.19%         +7.33%      +10.1565    +10.0158
 Euro/Sweden      EURSEK=     11.0060        10.9847     +0.19%         +5.13%      +11.0704    +10.9796
 

Source: Reuters (By Karen Brettell. Additional reporting by Olga Cotaga in London and Medha Singh in Bengaluru. Editing by Nick Zieminski)

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