* 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 gave up some of its
recent gains on Thursday after a 10% jump in oil prices boosted
commodity-linked currencies, though uncertainties over the
coronavirus pandemic kept the safe-haven greenback strong
against other major currencies.
Oil prices leapt on hopes that U.S. diplomacy would succeed
in persuading top exporters Saudi Arabia and Russia to end a
price war that has driven the crude oil market to its lowest
levels in almost two decades, and on a Bloomberg report on
China's oil purchases. That lifted commodity-linked currencies, with the Australian
dollar gaining 0.6% to $0.6110 AUD=D4 , and the Canadian dollar
firming 0.65% to C$1.4146 CAD=D4 .
But against most major currencies, the U.S. dollar held
firm, as investors unnerved by the massive disruption to global
trade caused by the pandemic took comfort from holding cash
dollars.
The dollar index against a basket of six major currencies
=USD stood flat at 99.470 after a gain of 0.53% overnight as
the U.S. currency advanced against most of its major peers.
The euro dipped 0.1% to $1.0947 EUR= after a 0.69% fall on
Wednesday.
The safe-haven yen, meantime, eased slightly, trading at
107.24 yen per dollar JPY= after hitting a two-week high of
106.925 on Wednesday.
Markets were spooked after U.S. President Donald Trump's
warning late Tuesday that Americans faced a "painful" two weeks
ahead in fighting the coronavirus. "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, which could struggle to contain an epidemic because
of their large, poor populations and weaker healthcare systems.
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 0.5% to edge near
its 22-year low hit late last month. Since the 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%.