REFILE-FOREX-Dollar strengthens, riskier currencies fall before U.S. jobs data

(Refiles to fix headline; no change in text.)
* Dollar recoups overnight losses
* Euro-dollar hits new high of $1.1916
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Elizabeth Howcroft
LONDON, Aug 6 (Reuters) - The dollar strengthened on
Thursday as risk appetite faded, with jobs data due in the
United States and lawmakers in Washington still unable to agree
on a new financial aid package.
Risk appetite had grown on Wednesday after ISM data in the
United States showed new service industry orders jumped to a
record high. But the data also showed that hiring
declined, suggesting a labour market recovery is faltering.
The dollar fell against a basket of currencies overnight,
reaching a two-year low of 92.495 at 0608 GMT, then picked up by
1001 GMT to trade 0.1% lower on the day at 92.821 =USD .
Euro-dollar reached a two-year high of $1.1916 towards the
end of the Asian session before slipping back to $1.1859
EUR=EBS . The euro was boosted by PMI data on Wednesday that
showed the euro zone economy starting to expand. Analysts worried that programmes to support the economy,
such as unemployment benefits, are covering up the underlying
damage to the economy.
"We are deluding ourselves stimulus to shield us can be
sustained forever everywhere. It can't," wrote Michael Every,
global strategist at Rabobank.
Investors were waiting for lawmakers to agree on a new
package of government support for the United States. With no
sign of an agreement in sight, Republicans and Democrats
remained trillions of dollars apart. Unemployment payments of $600 a week for the tens of
millions of Americans who lost their jobs in the pandemic ran
out last Friday. U.S. labour market data is due at
12.30 GMT.
"Today's jobless claims report will be closely watched:
should initial claims fail to re-enter a downward pattern, the
dollar may be set for another leg lower," wrote ING strategists.
The United States' said it was stepping up its campaign
against "untrusted" Chinese apps in U.S. digital networks, in a
further escalation of U.S.-China tensions, which contributed to
investor caution. The offshore Chinese yuan, which hit a five-month high on
Wednesday versus the dollar, weakened as the dollar rebounded
and was at 6.9450 on Thursday CNH=EBS .
The riskier Aussie and Kiwi dollars strengthened overnight
but fell as the dollar started to recover AUD=D3 NZD=D3 .
Australia's second-biggest city, Melbourne, started a
six-week total lockdown on Thursday, following a resurgence of
COVID-19 cases. The Swedish and Norwegian crowns fell versus the dollar,
having changed direction after the Swedish crown rose to its
strongest since mid-2018 at the end of the Asian session
SEK=D3 .
The Swiss franc rose against the euro and dollar as markets
turned more cautious EURCHF=EBS CHF=EBS . Versus the dollar,
it was at 0.90805, close to its highest in five years.
"The Swiss franc gained due to its safe-haven status and
reaccelerating Swiss exports. Carry trades, which usually hurt
the CHF, are unpopular given very low global policy rates,"
wrote Thomas Flury, head of FX strategies at UBS Global Wealth
Management.
"A test of the support at 0.90 appears imminent. We see a
high chance that profit taking will happen here and stop the
current CHF rally," he said.
In emerging markets, Turkey's lira hit a record low against
the euro and slid 2.7% against the dollar. Analysts warned of
inflation and predicted state attempts to aid the currency would
struggle.