* Dollar drops after shift in Fed policy
* Yen jumps after Abe resignation
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By April Joyner
NEW YORK, Aug 28 (Reuters) - The dollar fell on Friday as
the U.S. Federal Reserve's new policy framework suggested that
interest rates would remain low, while the yen surged after
Japanese Prime Minister Shinzo Abe announced his resignation.
The yen JPY=EBS significantly strengthened against the
dollar after the news that Abe, Japan's longest serving prime
minister, would step down due to worsening health. Concerns about a possible shift away from Abe's expansionary
economic policy, known as Abenomics, drove the move in the
safe-haven currency, investors said.
The dollar was last down 1.0% against the yen at 105.45.
"You're seeing yen strength on a little bit of uncertainty,"
said Lou Brien, strategist at DRW Trading in Chicago. "Abenomics
has been one of the more influential economic strategies."
The greenback resumed its slide against a basket of major
currencies in the wake of Fed Chair Jerome Powell's remarks at
the virtual Jackson Hole conference. Powell said the U.S.
central bank would seek to keep inflation at 2%, on average, so
that periods of too-low inflation would likely be followed by an
effort to lift inflation above 2% for some time. In practice, market participants expect that this means the
current ultra-low rates will stay lower for longer, thereby
pressuring the dollar. After recovering from an initial slide on
Thursday immediately after Powell's speech, the dollar weakened
once again overnight.
The dollar index =USD was last 0.5% lower at 92.513.
As the dollar weakened, the euro EUR=EBS climbed 0.4% to
$1.1875.
The euro's ascent puts it closer to a technical level of
$1.19, said Brien, which it has tested periodically over the
last month.
"If it goes through it, it could be a significant moment,"
he said. "The (Fed's) new stance on inflation gives it an
opportunity to retest it."
Currency markets were broadly pro-risk. The New Zealand
dollar NZD=D3 hit its highest against the U.S. dollar since
January while the Australian dollar rose to its highest since
December 2018 AUD=D3 .
The U.S. dollar also lost around 1.0% to the Norwegian crown
NOK=D3 and 0.8% to the Swedish crown SEK=D3 .
========================================================
Currency bid prices at 10:19AM (1419 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.1875 $1.1821 +0.46% +5.93% +1.1919 +1.1812
Dollar/Yen JPY= 105.4500 106.5500 -1.03% -3.13% +106.9400 +105.2100
Euro/Yen EURJPY= 125.25 125.96 -0.56% +2.71% +126.7500 +125.2000
Dollar/Swiss CHF= 0.9058 0.9088 -0.33% -6.41% +0.9102 +0.9025
Sterling/Dollar GBP= 1.3287 1.3198 +0.67% +0.21% +1.3320 +1.3187
Dollar/Canadian CAD= 1.3110 1.3123 -0.10% +0.95% +1.3132 +1.3047
Australian/Doll AUD= 0.7333 0.7258 +1.03% +4.44% +0.7349 +0.7256
ar
Euro/Swiss EURCHF= 1.0759 1.0744 +0.14% -0.86% +1.0768 +1.0743
Euro/Sterling EURGBP= 0.8938 0.8954 -0.18% +5.73% +0.8974 +0.8936
NZ NZD= 0.6714 0.6637 +1.16% -0.33% +0.6728 +0.6631
Dollar/Dollar
Dollar/Norway NOK= 8.8187 8.9151 -1.08% +0.46% +8.9218 +8.7781
Euro/Norway EURNOK= 10.4740 10.5370 -0.60% +6.47% +10.5530 +10.4530
Dollar/Sweden SEK= 8.6506 8.7160 -0.39% -7.45% +8.7355 +8.6100
Euro/Sweden EURSEK= 10.2749 10.3156 -0.39% -1.86% +10.3215 +10.2602