* Dollar index set to gain nearly 2.5% for the week
* Euro weakens on indecision on EU stimulus measures
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By Iain Withers
LONDON, April 3 (Reuters) - The dollar resumed its climb
versus major currencies on Friday as investors once again made
safety bids, amid worsening economic fallout from the
coronavirus pandemic.
The greenback index is on course for a near 2.5% gain over
the week, after it whipsawed last month from highs on a scramble
for cash, before slumping as the U.S. Federal Reserve flooded
the market with liquidity.
Indecision among euro zone governments about a rescue
package for economies hit by the outbreak has weakened the euro
in recent days, helping the dollar to its best day in two weeks
against the single currency on Thursday.
Analysts said the euro may also be faltering due to
rebalancing by forex reserve managers stocking up on dollars.
The dollar was up up 0.5% against the euro on Friday at
$1.0799, putting it on course for a 3% gain over the week.
EUR=EBS . It was was also up 0.5% against a basket of
currencies =USD .
As lockdowns continue, the economic impact of the epidemic
is becoming more marked, with purchasing managers' indexes
across the euro zone and Britain on Friday showing a slump in
business activity. The coronavirus is worsening in the United States where
weekly jobless claims doubled to 6.6 million last week. U.S.
payroll figures are due on Friday, although the cut-off period
for the survey is March 12 so it will not reflect the impact of
COVID-19.
"These global recession fears are terrifying the markets -
presumably without much differentiation between the countries.
Which is why the dollar is standing up rather well and might be
able to appreciate a little bit more," said analysts at
Commerzbank in a note.
Brief gains on Thursday in oil-exposed currencies such as
the Norwegian crown NOK= and Canadian dollar CAD=D3 on the
back of a rallying oil price mostly evaporated with some
retracement of oil's gains amid doubts around supply cuts. O/R
The Japanese yen, Swiss franc, sterling and the Australian
and New Zealand dollars all also lost ground as the dollar
strengthened across the board. JPY=EBS CHF=EBS GBP=D3
AUD=D3 NZD=D3
"Rising jobless numbers suggest that productive capacity is
being eroded," said Seema Shah, chief strategist at Principal
Global Investors in London.
"So when self-isolation measures are eventually lifted,
economic activity will take that much longer to get back on its
feet. The chances of a V-shaped economic recovery are fading."