(Recasts, updates prices, adds analyst comment)
* U.S. jobless claims up, data initially weighs on dollar
* U.S. dollar outlook remains bright
By Gertrude Chavez-Dreyfuss
NEW YORK, Aug 14 The U.S. dollar recovered from
early losses on Thursday in generally thin trading, boosted by
gains on Wall Street as tensions eased in Ukraine and the Middle
A robust U.S. 30-year bond auction supported Treasuries
prices in general and weighed on yields, which has ironically
underpinned the greenback, analysts said.
"The general sentiment in the market is that there is no
other alternative to U.S. assets right now," said Kathy Lien,
managing director at BK Asset Management in New York. "So that's
why you're seeing gains in U.S. Treasury debt prices, U.S.
equities, and the U.S. dollar."
Ordinarily, higher Treasury prices, which move inversely to
yields, are negative for the dollar because they mean lower
returns for investors. But Lien said higher debt prices could be
supportive of the greenback if they reflect strong demand for
U.S. assets, as in the case of the 30-year bond sale earlier in
In late trading, the dollar was up 0.1 percent against the
yen at 102.47. The dollar also recovered from losses
versus the euro, which last traded flat on the day at $1.3367
Political worries waned on Thursday, giving stocks and the
dollar a boost, after Russian President Vladimir Putin said
Russia would stand up for itself but not at the cost of
confrontation with the outside world, striking a conciliatory
tone after months of tough rhetoric aimed at Ukraine.
Earlier in the day, the dollar tumbled to session lows
against the euro after a rise in U.S. weekly jobless claims. The
jobless claims data came a day after an unexpectedly flat retail
sales report, which reinforced expectations the Federal Reserve
would be in no rush to raise interest rates. Higher interest
rates tend to enhance the dollar's appeal, as they boost the
yield of some U.S. assets.
Despite weak jobless claims data, the outlook for the dollar
remains upbeat, many analysts said, compared with that of the
euro and yen, whose economies are still struggling. An already
sluggish euro zone economy has hit a rough patch with the
negative impact of the Russia-Ukraine crisis on Germany, the
euro zone's largest nation.
Japan, meanwhile, remains mired in recession, with the
economy contracting 6.8 percent in the second quarter. Some
strategists have called for the dollar to hit 109 yen by
"The divergence in outlook between the U.S. and other
industrialized economies remains a key pillar of support for the
dollar," said Omer Esiner, chief market analyst at Commonwealth
Foreign Exchange in Washington.
(Reporting by Gertrude Chavez-Dreyfuss; Editing by Nick
Zieminski and Dan Grebler)