* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
(Updates prices, adds commentary, changes byline, previous dateline LONDON)
By Sinéad Carew
NEW YORK, Sept 24 (Reuters) - The U.S. dollar traded at a two-month high and was set for a fifth day
of gains on Thursday as investors sought safety on concerns over economic recovery as coronavirus cases
surged in Europe and on U.S. data showed rising unemployment claims.
Federal Reserve policymakers have called on the U.S. government to provide more fiscal support,
fuelling a bout of selling in risky assets overnight, while European economic data has worsened in recent
days prompting investors to lighten their positions after a rally in August.
Initial claims for state unemployment benefits increased 4,000 to a seasonally adjusted 870,000 for
the week ended Sept. 19, compared to 866,000 in the prior week and economist expectations for 840,000
"The U.S. dollar weakness theme got over-extended and there are people covering their shorts and
wondering if the weaker dollar trend has had enough. Economic data could play into that narrative," said
Katy Kaminski, chief research strategist and portfolio manager at AlphaSimplex Group, in Boston.
The dollar index, which measures the greenback against a basket of major currencies, was last
up 0.08% at 94.46 after earlier rising to 94.59, its highest level since July 24.
Appetite for riskier assets was already souring on Wednesday after data showed U.S. business activity
slowed in September and new restrictions to stem a surge in coronavirus infections in Europe hit the
Also puncturing market optimism were concerns U.S. policymakers will struggle to reach an agreement
for more fiscal stimulus as the Nov. 3 presidential election looms.
"Optimism on the recovery, optimism on the virus, and bets on stimulus were keeping markets well bid,
and on all three of these issues, there has been a degree of disappointment this month," said John Velis,
an FX and macro strategist at BNY Mellon.
Federal Reserve officials on Wednesday doubled down on efforts to convince investors they will keep
monetary policy easy for years to allow unemployment to fall, emphasizing that interest rates will stay
near zero until inflation gets to 2% and stays there.
Boston Federal Reserve Bank President Eric Rosengren said on Thursday the U.S. economy was far from
maximum employment or 2% inflation, and that interest rates would stay low for several years.
The Norwegian and the Swedish crown came under particular selling pressure. The dollar was last up 1%
against the Swedish crown after touching its highest level against the currency since July 14.
The dollar was up 0.64% and at its highest since July 1 against the Norwegian crown.
The British pound was slightly higher after the country's finance minister Rishi Sunak
announced a new job support scheme, but said the government wouldn't save every job.
The euro was down 0.12% against the dollar at $1.1645.
EU health officials warned on Thursday that a surge in COVID-19 cases in Europe risks becoming a
deadly double epidemic of flu and coronavirus infections as they urged Europeans and their governments not
to let their guard down.
The Aussie dollar fell 0.51% to $0.7038, near its weakest since July 21.
Currency bid prices at 10:21AM (1421 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Euro/Dollar EUR= $1.1645 $1.1659 -0.12% +3.85% +1.1680 +1.1627
Dollar/Yen JPY= 105.3800 105.3700 +0.01% -3.19% +105.5200 +105.2100
Euro/Yen EURJPY= 122.71 122.83 -0.10% +0.62% +123.1100 +122.5900
Dollar/Swiss CHF= 0.9259 0.9238 +0.23% -4.35% +0.9268 +0.9217
Sterling/Dollar GBP= 1.2732 1.2722 +0.08% -3.97% +1.2781 +1.2691
Dollar/Canadian CAD= 1.3386 1.3385 +0.01% +3.08% +1.3417 +1.3372
Australian/Doll AUD= 0.7038 0.7074 -0.51% +0.24% +0.7082 +0.7017
Euro/Swiss EURCHF= 1.0779 1.0774 +0.05% -0.67% +1.0789 +1.0756
Euro/Sterling EURGBP= 0.9142 0.9162 -0.22% +8.14% +0.9180 +0.9114
NZ NZD= 0.6528 0.6546 -0.27% -3.09% +0.6557 +0.6513
Dollar/Norway NOK= 9.5638 9.4907 +0.77% +8.92% +9.5954 +9.4733
Euro/Norway EURNOK= 11.1371 11.0671 +0.63% +13.21% +11.1774 +11.0520
Dollar/Sweden SEK= 9.1120 8.9971 +1.00% -2.52% +9.1267 +8.9987
Euro/Sweden EURSEK= 10.6131 10.5080 +1.00% +1.36% +10.6278 +10.5051
(Additional reporting by Saikat Chatterjee in London; Editing by Kirsten Donovan and Bernadette Baum)
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