* Treasury withdraws after US unemployment data
* The pound makes losses against the US dollar after a strong profit-making hit (updates prices, market activity, comments on the US open market; data changes, previous LONDON)
Saqib Iqbal Ahmed and Ritvik Carvalho
NEW YORK, April 8 (Reuters) – The U.S. dollar fell to a two-week low against a basket of currencies on Thursday, following Treasury yields lower after data showed a surprising rise in U.S. weekly unemployment claims.
The number of Americans filing for new unemployment benefits rose unexpectedly last week. Although the increase probably underestimated the sharp improvement in labor market conditions as more parts of the U.S. economy opened up and fiscal stimulus began, it was bad enough to bring down the return on money.
The US dollar currency index, which measures the return on money against a basket of six currencies, was 0.3% lower at 92,137, the lowest since March 23. The dollar also reached a two-week low against the Japanese yen.
Thursday’s data came after the release at the previous session of the minutes of a Federal Reserve policy meeting in March, which showed Fed officials were cautious about the risks of a pandemic – even as the US recovery came amid massive stimulus – and dedicated providing monetary policy support.
“With the labor market moving in the wrong direction, he underlined this week’s Fed minutes which stressed that the economy is far from what the Fed considers healthy,” said Joe Manimbo, a senior market analyst at Western Union Business Solutions in Washington. note.
“Data that reinforces the Fed’s willingness is likely to keep yields in the vault and the dollar anchored,” he said.
Fed Chairman Jerome Powell will speak at a virtual conference of the International Monetary Fund later Thursday.
The reference ten-year treasury yield on Thursday was around 1.632%, after falling below 1.63% overnight. At the end of last month, it reached 1.776%, the highest in more than a year.
The U.S. currency – which appreciated this year, partly aided by the gathering of U.S. treasury yields – is under pressure from recent sessions as yields have declined.
Sterling turned to the dollar and the euro on Thursday, reducing losses after earnings erosion, and traders are optimistic about its short-term outlook after a strong start to the year. The pound was up 0.14% from the greenback.
With gloomy data on claims for unemployed aspiring greengrocers, the Canadian dollar has strengthened, recovering from its lowest week.
(Reports by Saqib Iqbal Ahmed and Ritvik Carvalho; additional reporting by Kevin Buckland in Tokyo; editing by Larry King and Jonathan Oatis)