FOREX-Dollar rebounds after Fed minutes coy on policy strategy

* Overnight bounce was dollar's best daily jump since March
* Short squeeze exaggerated move - analysts
* AUD back under 72c, EUR below $1.19 and both steady in
Asia
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Tom Westbrook
SINGAPORE, Aug 20 (Reuters) - The dollar clung to overnight
gains on Thursday, after minutes from last month's U.S. Federal
Reserve meeting gave few clues about whether an even more dovish
shift in its policy framework is possible in the autumn,
disappointing some dollar bears.
A heavily shorted greenback put on its biggest one-day surge
since March after the release, hitting 93.159 against a basket
of currencies =USD , about 1% above Tuesday's two-year trough.
The move wiped out earlier gains made by other majors.
Speculation has been rife the Fed will adopt an average
inflation target, and seek to push inflation above 2% to make up
for years it has run below, as part of a broader policy review.
But the minutes were vague on the issue and merely said "a
number" of Fed members thought it would be helpful to make a
revised statement on its policy strategy at some point, without
providing details or timing. After hitting an 18-month high of $0.7275 before the
meeting, the Australian dollar AUD=D3 tumbled back below 72
cents and last sat at $0.7186. The New Zealand dollar NZD=D3
dropped almost 1.4% from its intraday high to sit at $0.6561.
The euro - the most stretched of all recent gainers on the
greenback - fell 0.7% overnight to trade back below $1.19. It
last sat at $1.1841 EUR=EBS . The pound GBP=D3 was dumped
back to $1.3103 and the dollar jumped 0.7% on the yen JPY= to
106.13.
"Traders were hoping (the minutes) would cement a clear
consensus in the Fed's ranks for a series of key changes in the
18 September meeting," said broker Pepperstone's head of
research, Chris Weston.
"(But) there seems little consensus in the Fed collective to
adopt an inflation-targeting regime, which is what so many have
positioned for."
The minutes also sounded pretty gloomy about the U.S.
economy and skeptical about capping government bond yields as a
means of encouraging recovery and investment - leading to a
modest sell off in Treasuries. The dollar's rebound comes after short bets against the
world's reserve currency had risen to their largest since 2011
last week and long bets on the euro were at a record high, which
has some investors feeling it could be short-lived blip.
0#NETUSDFX=
"All that was needed to push up the dollar was a catalyst;
the minutes provided the catalyst," said Commonwealth Bank of
Australia currency analyst Joe Capurso.
"Nevertheless, we still expect the dollar to track lower.
The rest of the world economy, led by China, is recovering...we
consider the Aussie's fall overnight as a short term pothole
along a road that trends higher."
For the Fed, the focus now shifts to whether more will be
revealed at the Aug. 27-28 virtual Jackson Hole symposium or at
September's meeting.
On Thursday investors expect China to keep its benchmark
lending rate steady when it is fixed at 0130 GMT. Later in the day, U.S. weekly jobless claims are expected to
drop even further below one million, and markets are warily
awaiting the Philadelphia Fed business index at 1230 GMT after a
disappointing reading from New York earlier in the week.