FOREX-Dollar firm after U.S. retail sales jump, risk currencies softer

* Dollar index up after strong data, Asian geopolitical
tensions
* Fed's Powell cautious on economic recovery
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Hideyuki Sano
TOKYO, June 17 (Reuters) - The dollar held firm against many
of its rivals on Wednesday after U.S. retail sales jumped far
more than expected in May,
while risk-sensitive currencies were hobbled by concerns about
the coronavirus and geopolitical tensions in Asia.
Federal Reserve chairman Jerome Powell also doused some of
the rosy expectations on Tuesday, as he painted a rather bleak
picture of the U.S. economy while also cementing market hopes
for continued policy support.
The dollar index =USD stood at 97.003, having risen about
0.4% on Tuesday.
The euro traded at $1.12635 EUR= , steady so far in Asia
after having lost 0.5% on Tuesday and in consolidation after
hitting a three-month high of $1.14225 a week ago.
Against the yen, the dollar was little changed at 107.39 yen
JPY= , stuck in a narrow range so far this week.
Tuesday's data showed U.S. retail sales jumping 17.7% last
month, outstripping economists' median forecast of 8.0%
increase.
The surge in retail sales last month recouped 63% of March
and April's decreases, raising hopes of a quick recovery in the
consumption, the driver of the U.S. economy.
Still, Fed chairman Powell had a word of caution in his
testimony at Congress, saying output and employment would remain
well short of their pre-pandemic levels for a long time, so
there was a "reasonable probability" that more policy support
would be needed. Powell added that a full U.S. economic recovery will not
occur until the American people are sure that the novel
coronavirus epidemic has been brought under control.
That still remains far from certain, with new coronavirus
infections hitting record highs in six U.S. states, including
populous Texas and Florida, on Tuesday. China also sharply ramped up restrictions on people leaving
the capital on Tuesday in an effort to stop the most serious
coronavirus flare-up since February from spreading to other
cities and provinces. "Market players are looking to, with caution, how critical
the impact from any second wave of infections on the economy
will be," said Kazushige Kaida, head of FX sales at State
Street.
"It's not that markets are pessimistic... But the length of
time people hold their positions is getting shorter," Kaida
said.
The Australian dollar eased 0.27% to $0.6865 AUD=D4 ,
slipping further from Tuesday's high of $0.6977.
"In Asia, there is a bit of risk-off mood following a
renewed outbreak of coronavirus in Beijing and also some
geopolitical tensions in the region," said Kyosuke Suzuki,
director of currencies at Societe Generale.
North Korea on Tuesday blew up a joint liaison office set up
in a border town in 2018 to foster better ties with South Korea,
prompting Seoul to say it will no longer accept unreasonable
behavior by the North. India's army said 20 of its soldiers had been killed in
clashes with Chinese troops at a disputed border site in the
western Himalayas - the first fatalities since a major border
clash in 1967 between the nuclear-armed neighbours.