NEW YORK (Reuters) – The dollar slipped on Thursday in quiet trading, weighed down by slightly weaker-than-expected U.S. jobless claims data that followed tepid inflation numbers and a dovish message from the Federal Reserve the previous session.

Currency moves however were confined to narrow ranges due to holidays in Asian markets.

In the cryptocurrency market, bitcoin hit another record of $48,481.45, as it continues its march toward the $50,000 mark. It was last up 6.3% at $47,685.

Thursday’s data showed initial claims for state unemployment benefits totalled a seasonally adjusted 793,000 for the week ended Feb. 6, compared to 812,000 a week before. Economists polled by Reuters had forecast 757,000 applications for the period.

“While the data have improved lately, filings remain very elevated by pre-pandemic standards and also have stayed above many of the figures reported back in October and November,” Daniel Silver, economist at JP Morgan, said in a research note.

In mid-morning trading, the dollar index was down 0.1% at 90.354. So far the dollar is on track for its largest weekly loss since around mid-December.

Prior to this week, the dollar had gained more than 2% since January as investors covered extreme short positions on the currency.

“Gains of the dollar that we saw over the past few weeks are just overdone and the downtrend we have seen the last few days was due to Treasury yields coming off,” said Ron Simpson, managing director, global currency analysis at Action Economics in Tampa, Florida.

Data on Wednesday showed U.S. core inflation last month was zero, data showed on Wednesday, against market expectations of 0.2%.

Federal Reserve Chair Jerome Powell reiterated on Wednesday that the central bank’s new policy framework could accommodate annual inflation above 2% for some time before raising rates, reinforcing market expectations of weak returns from the dollar.

Powell’s comments are keeping the dollar “somewhat on the defensive, but without any real definitive reasons to break out of ranges”, said Jeremy Stretch, head of G10 FX strategy at CIBC Capital Markets.

Currency market moves were small overnight because of holidays in Japan and China, but the dollar fell close to two-week lows against a basket of currencies before recovering somewhat as European markets opened.

The euro was up around 0.2% against the dollar at $1.2138. A European Commission forecast that the euro zone economy will rebound less than expected in 2021 did not impact the currency.

“Going forward, the dollar is going to do better, against the euro for one,” said Action’s Simpson. “The potential for economic recovery in Europe is looking pretty dismal right now.” The Australian dollar – viewed as a liquid proxy for risk appetite – was up 0.5% at US$0.7765. It hit a three-week high earlier in the session of US$0.7772.

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