Dollar gains after US jobless claims fall more than expected

NEW YORK, Aug 8 (Reuters) – The dollar rose on Thursday after new U.S. labor market data showed that unemployment benefits fell more than expected last week, easing fears of an imminent recession.

The sharp moves in the yen pushed the dollar index , which measures the U.S. currency against six others, including the yen, to a weekly high, before backing off. It was last up to 103.21, above Monday’s seven-month low of 102.15.

Still, market participants were bracing for more volatility.

“Regardless of the fact that risk is a bit higher today, the degree of these swings that we’re having on a seemingly daily basis, or at least every other day, I don’t think is a healthy sign,” said Eugene Epstein, head of structured products, North America, at Moneycorp.

The contrasting opinions from the summary and Uchida on whether the BOJ will continue to raise rates, or pause as a result of market volatility, underscores the delicate task facing the central bank and will likely keep investors skittish.

“As the market pulls back from the edge of the brink … U.S. interest rates have firmed up, and I think this is going to give the dollar/yen a little bit more of a lift,” said Marc Chandler, chief market strategist at Bannockburn Global Forex.

Even if the U.S. Federal Reserve does deliver a steep rate cut, as most traders are expecting in September, and the BOJ another increase, there would still be an incentive to use the yen to fund other trades.

The Swiss franc , another currency that was used to fund carry trades and that benefited from the unwinding momentum earlier this week, was down 0.47% at 0.866 per dollar, after dropping more than 1% on Wednesday.

The euro was down 0.05% at $1.0917, while sterling was up 0.48% at $1.275.

Investor focus will now be on the U.S. consumer price inflation report for July due next week, as well as comments by Fed Chair Jerome Powell at the central bank’s Jackson Hole Economic Policy Symposium on Aug. 22-24.

“Investors need to brace for a bumpy ride,” said Vasu Menon, managing director of investment strategy at OCBC.

The Australian dollar rose 1.12% to $0.659, while the New Zealand dollar was up 0.25% at $0.601.

In cryptocurrencies, bitcoin was up 7.6% to $59,334.95, rebounding after falling below the $50,000 mark on Monday. Ether was last up 9.72% to $2,577.70.

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Hannah Lang covers financial technology and cryptocurrency, including the businesses that drive the industry and policy developments that govern the sector. Hannah previously worked at American Banker where she covered bank regulation and the Federal Reserve. She graduated from the University of Maryland, College Park and lives in Washington, DC.