* Dollar index remains up after better-than-expected data
* Euro earlier hit one-week low against dollar
* Graphic: World FX rates in 2020 tmsnrt.rs/2RBWI5E (New throughout; previous dateline LONDON)
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 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, having slipped earlier in the session to a one-week low of $1.1789. The dollar index was up 0.11% to 92.82. (Reporting by Kate Duguid in New York and Olga Cotaga in London Editing by Marguerita Choy)
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