* U.S. weekly unemployment claims paint lower, but backlogs, layoffs kill
* U.S.-China tensions support greenback (Updates to U.S. afternoon)
By Saqib Iqbal Ahmed
NEW YORK, May 21 (Reuters) – The dollar rose higher against a basket of peers on Thursday as investors weighed the impact of the global economic shutdown and the euro’s four-day demonstration against the U.S. currency on optimism about a closer financial union in Europe ran out of steam.
USA. The Dollar Currency Index, which measures the strength of the greenback against six major currencies, rose 0.2% to 99,385.
Data on Thursday showed millions more Americans applying for unemployment benefits last week as demand continues to erode, and disruptions from the new coronavirus release another wave of layoffs, pointing to another month of staggering job losses in May.
Greenback, which draws investors in times of financial uncertainty, has weakened since hitting a more than three-year high in March as central bank interventions have eased the international dollar shortfall and investors have resorted to risky assets.
“The USD has fallen to the lower end of the trading area that has been in place for weeks as markets assess global economic lock-up,” said Shaun Osborne Chief FX strategist at Scotia Bank.
“We believe that the possibility of further losses is likely to be limited unless a fresh fundamental dynamic arises to trade.”
Growing Sino-U.S. tensions, with President Donald Trump saying the United States would react strongly if China introduces national security laws for Hong Kong in response to last year’s often violent protocols, backed the dollar.
The euro, up 1.6% over the past four sessions, helped by France and Germany’s recent proposal for a € 500 billion ($ 543 billion) recovery fund to provide grants to regions and sectors most affected The coronavirus pandemic was 0.21% lower at $ 1.0956.
The pound was roughly flat the day against the dollar, but remains under pressure amid concerns that the Bank of England may cut interest rates below zero.
(Reporting by Saqib Iqbal Ahmed Editing by Nick Zieminski and Tom Brown)