FOREX-Dollar holds gains, shrugging off drop in jobless claims

* Dollar index remains up after better-than-expected data
* Euro earlier hit one-week low against dollar
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

(New throughout; previous dateline LONDON)
By Kate Duguid
NEW YORK, Sept 3 (Reuters) - A report on Thursday showing
that the number of Americans filing new claims for unemployment
benefits fell more than expected last week did little to dent
the safe-haven appeal of the dollar, which earlier in the
session hit a week high against the euro.
The dollar index =USD dipped slightly following the U.S.
Labor Department's report, but largely held onto the gains it
made this week as the euro has fallen. Analysts suggested that
the data itself was not strong enough to merit a strong risk-on
move and that a seasonal adjustment may have made the drop
appear bigger than it was.
The Labor Department reported that initial claims for state
unemployment benefits totaled a seasonally adjusted 881,000 for
the week ended Aug. 29, compared with 1.011 million in the prior
week. But the figure still remains extraordinarily high, one of
several signs that the labor market recovery has been losing
steam as the COVID-19 pandemic continues and government support
lapses. "The seasonal adjustment issue means we cannot really
compare initial claims to the prior reads at this moment," said
Ian Lyngen, head of U.S. rates strategy at BMO Capital Markets.
"Our takeaway is that the adjustment methodology makes the
drop in initial claims appear larger than it actually was."
Earlier, the dollar rose as investors trimmed bets against
the greenback and sold the euro on concerns that the European
Central Bank was worried about its rise. The surge has lifted
the greenback about 1.3% above the 28-month low it hit against a
basket of currencies on Tuesday.
Few analysts expect it to hold for too long, but the dollar
gained broadly in Asian trade and will be the first time it has
climbed three sessions in a row since May.
After the euro touched $1.20 earlier this week, worries
brewed in the market that the rise had come too fast and strong
for the ECB's liking.
ECB policymakers reportedly warned that if the euro keeps
appreciating it will weigh on exports, drag down prices and
intensify pressure for more monetary stimulus.
"Comments by European Central Bank (ECB) chief economist,
Philip Lane, (Tuesday) may have marked the first of many verbal
interventions to try and prevent the Euro from strengthening
much more from here," said George Vessey, currency strategist at
Western Union Business Solutions.
The euro was last down 0.13% at $1.184 EUR= , having
slipped earlier in the session to a one-week low of $1.1789. The
dollar index =USD was up 0.11% to 92.82.