FOREX-Dollar drops as record jobless claims make further stimulus more likely

Reuters

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    * Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

 (Adds details, updates prices)
    By Karen Brettell
    NEW YORK, March 26 (Reuters) - The dollar dropped broadly on
Thursday after an unprecedented rise in jobless claims led
investors to anticipate that the U.S. government and Federal
Reserve would take new steps to stimulate the economy.
    The number of Americans filing claims for unemployment
benefits surged to a record of more than 3 million last week as
strict measures to contain the coronavirus pandemic brought the
country to a sudden halt, unleashing a wave of layoffs that
likely ended the longest employment boom in U.S. history.
 urn:newsml:reuters.com:*:nL1N2BI1VH
    “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 jobless blowout was announced shortly after Federal
Reserve Chairman Jerome Powell said that the U.S. "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.
 urn:newsml:reuters.com:*:nL1N2BJ0HW
    Stocks rallied for the third day despite the dour number, as
investors focused on the prospect of additional stimulus.
 urn:newsml:reuters.com:*:nL1N2BJ2AY
    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.
 urn:newsml:reuters.com:*:nL1N2BI0KN
    House Speaker Nancy Pelosi said the next step would be
legislation to address family leave, pensions, food aid and more
assistance to state and local government, saying that there is
no question that more money will be needed.  urn:newsml:reuters.com:*:nW1N2BC03N
    The euro  EUR=  jumped 1.42% against the greenback to
$1.1034. The dollar weakened 1.57% against the Japanese yen
 JPY=  to 109.44 yen.
    Sterling  GBP=  surged 2.43% to $1.2174 and the Australian
dollar  AUD=  gained 2.00% to $0.6077.
    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 U.S.
dollar last week sent it to three year highs against the euro,
35-year highs against sterling and 17-year highs against the
Australian dollar.
    But many analysts see volatility in markets persisting until
the worst of the virus and its effects have passed.
    “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.

    ========================================================
    Currency bid prices at 3:31PM (1931 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1034        $1.0880     +1.42%         -1.57%      +1.1046     +1.0872
 Dollar/Yen       JPY=        109.4400       111.1900    -1.57%         +0.53%      +111.3000   +109.2200
 Euro/Yen         EURJPY=     120.77         121.00      -0.19%         -0.97%      +121.0800   +119.9700
 Dollar/Swiss     CHF=        0.9629         0.9767      -1.41%         -0.51%      +0.9777     +0.9621
 Sterling/Dollar  GBP=        1.2174         1.1885      +2.43%         -8.18%      +1.2185     +1.1778
 Dollar/Canadian  CAD=        1.4036         1.4190      -1.09%         +8.09%      +1.4275     +1.4010
 Australian/Doll  AUD=        0.6077         0.5958      +2.00%         -13.45%     +0.6087     +0.5871
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.0626         1.0628      -0.02%         -2.08%      +1.0653     +1.0619
 Euro/Sterling    EURGBP=     0.9062         0.9150      -0.96%         +7.19%      +0.9239     +0.9060
 NZ               NZD=        0.5977         0.5848      +2.21%         -11.27%     +0.5987     +0.5779
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        10.4321        10.7480     -2.94%         +18.79%     +10.8276    +10.4024
 Euro/Norway      EURNOK=     11.5160        11.6970     -1.55%         +17.06%     +11.8276    +11.4532
 Dollar/Sweden    SEK=        9.9179         10.0749     -0.29%         +6.10%      +10.1565    +9.8968
 Euro/Sweden      EURSEK=     10.9531        10.9847     -0.29%         +4.62%      +11.0704    +10.9309
 
    
    

 (Additional reporting by Olga Cotaga in London and Medha Singh
in Bengaluru
Editing by Nick Zieminski)

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