* Dollar broadly supported as investors want liquid currency
* Safe-haven yen near 2-week high vs dollar
* Emerging market currencies battered
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By Hideyuki Sano
TOKYO, April 2 (Reuters) - The dollar held gains on Thursday
as investors rushed to the safety of the world's most liquid
currency given the massive disruption to global trade due to the
coronavirus pandemic.
The dollar index against a basket of major six currencies
=USD stood flat at 99.588 after a gain of 0.53% overnight as
the U.S. currency advanced against most of its major peers.
Early on Thursday, the euro dipped 0.2% to $1.0924 EUR=
after a 0.69% fall on Wednesday. Sterling fetched $1.2382
GBP=D4 , up 0.2%, paring about a half its prior day's losses.
The Australian dollar changed hands at $0.6080 AUD=D4 ,
having dropped 0.99% in the previous session.
The dollar also bounced back 0.3% to 107.15 yen JPY= after
it touched a two-week low of 106.925 on Wednesday.
Markets were spooked after U.S. President Donald Trump's
dire press briefing late Tuesday, in which he warned Americans
of a "painful" two weeks ahead in fighting the coronavirus even
with strict social distancing measures. "If America's optimistic president is warning the worst of
the pandemic is yet to come, what factory in their right mind
would keep the doors open and workers on the payroll?" asked
Chris Rupkey, chief financial economist at MUFG Union Bank in
New York.
"With only a few actual data points so far, the results
indicate this is looking more like a depression than a
garden-variety recession."
The starkest evidence of the damage came last week when
weekly U.S. initial jobless claims, one of the earliest gauges
of economic trends, jumped to 3.28 million, blowing past the
previous record of 695,000 set in 1982. The next jobless claims data, due at 1230 GMT, is expected
to show another 3.50 million applications last week.
Economists' forecast in a Reuters poll range from 1.5
million to 5.25 million.
"As we've seen yesterday, a deterioration in the U.S.
economic outlook is likely to lead to strength in the yen
against the U.S. dollar," said Shin-ichiro Kadota, senior
strategist at Barclays.
EMERGING MARKET CURRENCIES BATTERED
The pandemic has shown few signs of abating with global
cases on track to hit one million within a day or two,
stretching over more than 200 countries. While there are signs infections in hard-hit Italy might be
levelling off after a few weeks of lockdown, cases are growing
rapidly in many other countries including the United States.
Asian financial centres that have so far been spared the
worst of the epidemic, such as Tokyo, Hong Kong and Singapore,
have seen alarming rises in recent weeks.
"Trade isn't active as few want to take extra risks. And for
some traders their own health is becoming more important than
trading," said a trader at a U.S. bank.
The virus is also spreading quickly in many emerging market
countries, some of which investors fear may struggle to contain
it due to limited medical capabilities and fragile hygiene.
Such worries are putting additional stress on countries
saddled with economic vulnerabilities such as wide current
account deficits, high levels of external debt and limited
foreign currency reserves.
In Asia, the Indonesian rupiah IDR= lost 0.6% to edge near
its 22-year low hit late last month. Since virus fears started
to hit markets in late February, the rupiah has fallen 17%.
The Brazilian real BRL= and the South African rand
ZAR=D4 both hit record lows on Wednesday while the Turkish
lira TRYTOM=D4 sank to a two-year low.
Since late February, the real has lost 16% while the rand
has given up 17% and the lira has shed 9%.