The dollar index briefly pared gains before gaining ground following the claims data, which also showed 31.3 million people were receiving unemployment checks in mid-July, suggesting the U.S. labor market was stalling.

The dollar index, which measures the dollar against a basket of currencies, was last up 0.3% at 93.057. <=USD> The index lost 4% in July.

"The market is mostly just consolidating a little bit after this amazing weakness we've had of late," said Axel Merk, president and chief investment officer at Merk Hard Currency Fund in Palo Alto, California.

At the same time, "the weakest currencies are the ones that have been doing the best in recent days."

The euro was down 0.1% at $1.1844 against the dollar after reaching a two-year high of $1.1916 .

Analysts worried that programs such as unemployment benefits are covering up underlying damage to the economy.

Investors were waiting for U.S. lawmakers to agree on a new package of support for the United States. With no sign of an agreement in sight, Republicans and Democrats remained trillions of dollars apart.

In emerging markets, Turkey's lira earlier hit a record low against the euro. Analysts warned of inflation and predicted state attempts to aid the currency would struggle.

"That is a concern because that it could have ripple effects elsewhere," Merk said.

The Aussie dollar was last up 0.4% at $0.7221 against the U.S. dollar.

Australia's second-biggest city, Melbourne, started a six-week total lockdown on Thursday, following a resurgence of COVID-19 cases.

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Currency bid prices at 11:04AM (1504 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Euro/Dollar EUR= $1.1844 $1.1861 -0.14% +5.66% +1.1915 +1.1819

Dollar/Yen JPY= 105.5000 105.5700 -0.07% -3.09% +105.6900 +105.3100

Euro/Yen EURJPY= 124.96 125.25 -0.23% +2.47% +125.5800 +124.6900

Dollar/Swiss CHF= 0.9106 0.9083 +0.25% -5.91% +0.9129 +0.9066

Sterling/Dollar GBP= 1.3143 1.3112 +0.24% -0.87% +1.3185 +1.3113

Dollar/Canadian CAD= 1.3295 1.3264 +0.23% +2.38% +1.3322 +1.3243

Australian/Doll AUD= 0.7221 0.7191 +0.42% +2.85% +0.7223 +0.7175

ar

Euro/Swiss EURCHF= 1.0788 1.0775 +0.12% -0.60% +1.0807 +1.0753

Euro/Sterling EURGBP= 0.9010 0.9044 -0.38% +6.58% +0.9053 +0.8985

NZ NZD= 0.6658 0.6645 +0.20% -1.16% +0.6669 +0.6629

Dollar/Dollar

Dollar/Norway NOK= 8.9830 8.9499 +0.37% +2.33% +9.0171 +8.9043

Euro/Norway EURNOK= 10.6427 10.6176 +0.24% +8.18% +10.6738 +10.6076

Dollar/Sweden SEK= 8.6966 8.6666 +0.18% -6.95% +8.7225 +8.6267

Euro/Sweden EURSEK= 10.3019 10.2833 +0.18% -1.59% +10.3241 +10.2702

By Caroline Valetkevitch