* Treasury yields retreat after U.S. jobless data
* Pound stems losses vs. USD after hard profit-taking hit
(Updates to U.S. afternoon)
By Saqib Iqbal Ahmed and Ritvik Carvalho
NEW YORK, April 8 (Reuters) - The U.S. dollar dipped to a
two-week low against a basket of currencies on Thursday,
tracking Treasury yields lower, after data showed a surprise
rise in U.S. weekly jobless claims.
While the increase likely understates rapidly improving
labor market conditions as more parts of the U.S. economy reopen
and fiscal stimulus kicks in, it was bad enough to knock down
the greenback. The dollar index =USD measuring the greenback against a
basket of six currencies was 0.35% lower at 92.091, its lowest
since March 23.
Thursday's data followed the release in the previous session
of minutes from the Federal Reserve's March policy meeting,
which showed Fed officials remained cautious about the risks of
the pandemic - even as the U.S. recovery gathered steam amid the
massive stimulus - and committed to providing monetary policy
support. "With the job market moving in the wrong direction, it
underscored this week's Fed minutes that emphasized how the
economy was far from what the Fed considers to be healthy," Joe
Manimbo, senior market analyst at Western Union Business
Solutions in Washington, said in a note.
"Data that reinforces the Fed's dovish stance is likely to
keep Treasury yields and the dollar anchored," he said.
On Thursday, Federal Reserve Chair Jerome Powell signaled
the central bank is nowhere near to reducing its support for the
U.S. economy, noting that an expected rise in prices this year
is likely to be temporary, and warning that an uptick in
COVID-19 cases could slow the recovery. The benchmark 10-year Treasury yield US10YT=RR was around
1.632% on Thursday, after dipping below 1.63% overnight. It hit
1.776% late last month, its highest in more than a year.
The U.S. currency - which appreciated this year, helped in
part by a rally in U.S. Treasury yields - has come under
pressure in recent sessions as yields have retreated.
With Treasury yields diminishing the greenback's relative
appeal, the yen rose to a two-week high against the U.S.
currency.
Sterling steadied against the dollar to trade about flat on
the day, stanching its recent losses after a bruising bout of
profit-taking, with traders optimistic about its near-term
prospects after a strong start to the year.
With the jobless claims data weighing on the greenback, the
Canadian dollar CAD=D4 edged higher, recovering from a
one-week low. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
World FX rates https://tmsnrt.rs/2RBWI5E
Falling yields drive USD lower https://tmsnrt.rs/3cWvaFb
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