FOREX-Dollar edges higher as four-day euro rally fizzles

* U.S. weekly jobless claims grind lower but backlogs,
layoffs
linger
* U.S.-China tensions support greenback

(Updates to U.S. afternoon)
By Saqib Iqbal Ahmed
NEW YORK, May 21 (Reuters) - The dollar edged higher against
a basket of peers on Thursday as investors weighed the impact of
the global economic lockdown, and the euro's four-day rally
against the U.S. currency on optimism about a closer fiscal
union in Europe ran out of steam.
The U.S. Dollar Currency Index =USD , which measures the
greenback's strength against six major currencies, was up 0.2%
at 99.385.
Data on Thursday showed millions more Americans filed for
unemployment benefits last week as backlogs continue to be
cleared and disruptions from the novel coronavirus unleash a
second wave of layoffs, pointing to another month of staggering
job losses in May. The greenback, which draws investors in times of economic
uncertainty, has weakened since hitting a more than three-year
high in March as central bank interventions have eased
international dollar shortage and investors have gravitated
toward risky assets.
"The USD has dropped to the lower end of the trading range
that has been in place for some weeks as markets assess the
global economic lock down," said Shaun Osborne Chief FX
strategist at Scotia Bank.
"We think scope for additional losses is likely limited
unless some fresh fundamental dynamic emerges to drive trading."
Growing Sino-U.S. tensions, with President Donald Trump
saying the United States would react strongly if China imposes
national security laws for Hong Kong in response to last year's
often violent pro-democracy protests, supported the dollar.
euro, which rose 1.6% over the last four sessions,
helped by France and Germany's recent proposal for a
500-billion-euro ($543 billion) recovery fund to offer grants to
regions and sectors hit hardest by the coronavirus pandemic, was
0.21% lower at $1.0956. The pound was about flat on the day against the dollar but
remains under pressure amid worries that the Bank of England may
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GRAPHIC: FX positions https://tmsnrt.rs/3bJyfVj
GRAPHIC: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
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