FOREX-Dollar falls to five-day lows after Powell's comments

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Saikat Chatterjee
LONDON, July 11 (Reuters) - The dollar fell to a five-day
low on Thursday after Federal Reserve Chair Jerome Powell kept
the door open for U.S. interest rate cuts, though investors were
wary of selling dollars aggressively until a policy review later
this month.
In testimony to Congress, Powell pointed to "broad" global
weakness that was clouding the U.S. economic outlook amid
uncertainty about the fallout from the trade conflict with China
and other nations. His comments did little to change market expectations --
money markets expect one rate cut later this month and a
cumulative 68 basis points of cuts until the end of 2019 -- but
market watchers said Powell's views will drive the dollar.
"Once we get a quarter-point rate cut, which markets are
widely expecting, Powell will keep all options open on the
table, and that means the dollar's outlook is uncertain," said
Manuel Oliveri, an FX strategist at Credit Agricole in London.
Against a basket of other currencies .DXY , the dollar fell
0.2% to 96.83, its lowest since July 5 and near the three-month
low of 95.84 from late June.
Uncertainty about the dollar's outlook prompted some
investors to unwind short positions against some heavily shorted
currencies, such as the Australian dollar, which rose 0.2% in
early London trading.
Latest positioning data showed that hedge funds had built up
a large short position in the Australian dollar in recent weeks
because of the trade tensions between Washington and Beijing.
In contrast, hedge funds had rapidly unwound large long
positions in the dollar, especially against a basket of major
and emerging-market currencies, NETUSDALL= anticipating U.S.
rate cuts.
Elsewhere, the British pound rose from six-month lows to
$1.2529 GBP=D3 . But it remains down for the week, amid
Britain's economic gloom and a fast-approaching Brexit deadline.