Dollar hits three-week high, shrugging off grim U.S. data

By Gertrude Chavez-Dreyfuss and Kate Duguid

NEW YORK (Reuters) - The dollar rose to a three-week high on Thursday as traders overlooked another week of roughly 3 million new jobless claims, evidence of a second wave of coronavirus-related lay-offs.

The Japanese yen and Swiss franc were both weaker against the dollar and flat versus the euro, and U.S. stocks ended the day up, suggesting the dollar's bid was not part of a broader risk-off move.

The Labor Department's weekly jobless claims report on Thursday, the most timely data on the economy, supports the contention that it would take a while for activity to rebound even as businesses in many states reopen after shuttering in mid-March as authorities tried to slow the spread of COVID-19, the respiratory illness caused by the virus.

The latest data lifted to 36.5 million the number of people who have filed claims for unemployment benefits since mid-March, with more than one in five workers losing their job. Claims will be closely watched in the coming weeks for signs of whether companies rehire workers as businesses reopen.

Against a basket of its rivals <=USD>, the dollar was up 0.20% at 100.37, hitting a three-week high of 100.56 early in the session.

"The USD shrugged off the higher-than-forecast jobless claims, and deflationary trade prices, though Wall Street took a dive, before later turning higher," wrote analysts at Action Economics.

The euro was down 0.23% against the dollar at $1.079 .

"Economic fundamentals remain bleak on both sides of the Atlantic, with markets continuing to look through the data. Big picture, the pairing remains inside of recent trading ranges, and until a clearer view of the re-opening of economies becomes evident, more of the same is anticipated," wrote the analysts.

Earlier in the session the pound tumbled below the $1.22 line for the first time in more than five weeks after Wednesday's data showed Britain's economy shrank by a record 5.8% in March as the coronavirus crisis escalated. It later recovered, last trading down only 0.06% at $1.222.

(Reporting by Gertrude Chavez-Dreyfuss and Kate Duguid; Additional reporting by Saikat Chatterjee in London; Editing by Bernadette Baum and Dan Grebler)