FOREX-Dollar recovers from 2-year trough on weak data, Fed outlook

* Dollar jumped after Fed minutes less dovish than some
expected
* Calls to take profits after euro surge
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBTREASURIES
PRICESWI5E https://tmsnrt.rs/2RBWI5E

(New throughout; changes dateline, previous LONDON)
By Kate Duguid
LONDON, Aug 20 (Reuters) - Weekly U.S. jobless claims on
Thursday once again surged over 1 million, which helped the
dollar solidify gains it made on Wednesday after less
dovish-than-expected minutes from last month's U.S. Federal
Reserve policy meeting lifted the greenback off a two-year low.
The dollar index =USD has climbed about 1% from the
two-year low of 92.124 hit on Tuesday. Mid-morning on Thursday
the index was roughly flat on the day at 92.954, but was broadly
maintaining the previous days' gains as weak economic data
helped the safe-haven currency.
Other safe havens like the Japanese yen JPY= , also
benefited, last up 0.14% to 105.95 yen per dollar.
The Labor Department reported on Thursday that the number of
Americans filing a new claim for unemployment benefits rose
unexpectedly to 1.106 million for the week ended Aug. 15, from
the 971,000 the week before. The previous week's level had
marked the first time since March that new claims had registered
below 1 million.
"The U.S. dollar mostly weathered disappointing news on the
job market which weighed on broader markets and offered a haven
lift," said Joe Manimbo, senior market analyst at Western Union
Business Solutions.
Federal Open Market Committee minutes released on Wednesday
prompted dollar bears to buy into the heavily shorted currency,
fueling its biggest one-day surge in more than two months. Bears
have reaped rich returns from shorting the greenback in recent
weeks as the United States has struggled to tame the coronavirus
pandemic and the unprecedented policy stimulus unleashed by the
Fed had darkened the outlook for the safe-haven dollar.
But with short bets approaching historical extremes and a
resurgence of COVID-19 cases in Europe, investors are turning
less bearish on the greenback.
"Severe selling that drove the U.S. dollar to 27-month lows
eased after minutes from the Fed's last meeting were read as
less dovish. The details of the Fed's late July meeting stopped
short of signaling an imminent shift to putting a lid on
Treasury yields or allowing inflation to run hotter," Manimbo
said.
The tone of the minutes "catalyzed some profit taking for
one of the summer's blockbuster and profitable trades: shorting
the greenback," Manimbo said.
The euro EUR= - the biggest beneficiary of dollar weakness
- fell back below $1.19, though it was very slightly higher on
Thursday at $1.184.


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