FOREX-Dollar rises after Fed's upbeat economic outlook

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

By Eimi Yamamitsu
TOKYO, Sept 17 (Reuters) - The dollar edged up against major
currencies on Thursday following the U.S. Federal Reserve's
upbeat assessment of the economic recovery and as its increased
tolerance for higher inflation push bond yields higher.
At its policy meeting, the Fed pledged to keep rates near
zero until the labour market reaches "maximum employment" and
inflation is on track to "moderately exceed" the 2% inflation
target.
The Fed also expects economic growth to improve from the
coronavirus-induced drop they projected in June.
The dollar index rose 0.2% against six major currencies to
trade at 93.389 =USD , while changing hands at 1.1777 against
the euro EUR=EBS .
The greenback initially fell after the Fed's announcement,
and weaker-than-expected U.S. retail sales data, but swung into
postive territory after Chair Jerome Powell's comment on
economic outlook.
"The dollar shifted a little, but the market overall did not
show a huge reaction," said Shinichiro Kadota, senior strategist
at Baraclays.
"Besides the presidential election, I think the focus will
be on the U.S. fiscal support, which (Fed Chair Jerome) Powell
also said is essential. The Congress is still struggling with
stimulus talks, and markets are eyeing if that would be
resolved."
The safe-haven Japanese yen JPY=EBS changed hands at
105.035 against the greenback, a fraction below a 2 1/2-month
high of 104.81 marked overnight.
The Bank of Japan is due to conclude its first meeting after
Yoshihide Suga, a long-time aide of Shinzo Abe who pledged to
continue "Abenomics" to recover employment, was officially
elected as Japan's new prime minister on Wednesday.
Market participants will focus on BOJ Governor Haruhiko
Kuroda's remarks about how the central bank would coordinate
monetary policy with the new Suga administration. Elsewhere, the Chinese yuan in offshore trade CNH=D3 was
near the 16-month high of 6.7652 per dollar it hit after strong
retail sales and industrial output data on Tuesday.
The focus for sterling is now on Brexit tensions, following
the British government's deal on Wednesday to avert a rebellion
in Prime Minister Boris Johnson's own party, giving parliament a
say over the use of post-Brexit powers.
The pound was last at $1.2933 GBP=D3 , having dropped more
than 3.5% against the greenback and the euro last week.
Against the euro, it changed hands at 0.91025 pence per
euro, near a 5-1/2 month low it hit earlier this week
EURGBP=D3 .
The Bank of England is likely to signal that it is getting
ready to pump more stimulus into Britain's coronavirus-hit
economy at its policy decision due later in the day.

The kiwi NZD=D3 traded 0.3% below at $0.6714, after data
showed New Zealand fell into its deepest slump on record as the
coronavirus outbreak paralysed business activity.
The Australian dollar AUD=D3 traded at $0.7304 after the
country's jobs data showed employment rose in August.