FOREX-Dollar on backfoot as investors look for dovish Fed signals

* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Hideyuki Sano
TOKYO, Aug 27 (Reuters) - The dollar wallowed near its
lowest level for the week on Thursday as investors looked for
hints from Federal Reserve Chairman Jerome Powell that the
central bank might tweak its policy framework to help push up
inflation.
Powell is scheduled to address the Fed's annual central
bankers' conference later in the day, usually held in Jackson
Hole, Wyoming, but being conducted virtually this year because
of the ongoing COVID-19 pandemic.
Investors are betting the U.S. central bank will introduce a
new policy framework to fight persistently low inflation as
early as next month.
"If the Fed turns out to be less dovish than many have been
thinking, we could see a rally in the dollar," said Kyosuke
Suzuki, director of forex at Societe Generale in Tokyo.
The dollar's index against six major currencies =USD stood
at 92.834, near the lowest level so far this week.
The euro changed hands at $1.1837 EUR= , near its highest
level so far this week, though few market players expect a clear
break from its range so far this week ahead of Powell's speech.
The dollar slipped to 105.90 JPY= , losing steam after
hitting a one-week high of 106.58 on Tuesday.
A key focus for the yen is Prime Minister Shinzo Abe's news
conference scheduled for Friday amid rising speculation over his
health. The yen is likely to gain should Abe decide to resign, given
perception that aggressive monetary easing with close
co-operation between the government and the central bank, dubbed
Abenomics, has been one of his trademark policies, traders said.
The British pound stood firm at $1.3213 GBP=D4 , having
gained 0.9% since the start of week, while the Australian dollar
AUD=D4 was changing hands at $0.7241 AUD=D4 up 1.1% so far
this week.
The Chinese yuan was at its strong levels since January
after U.S. and Chinese officials reaffirmed their commitment to
a Phase 1 trade deal earlier this week despite tense bilateral
relations. The offshore yuan stood at 6.8774 per dollar CNH= , its
highest level since Jan. 21.