FOREX-Fed's gloomy outlook steadies dollar slide, for now

* Modest dollar bounce as Fed forecasts hit mood
* Aussie and kiwi dip, yen gains extend to fresh 1-month
high
* Fed sees U.S. growth -6.5% in 2020, promises to keep
policy easy
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Tom Westbrook
SINGAPORE, June 11 (Reuters) - The dollar steadied against
riskier currencies and the safe-haven yen hit a one-month high
on Thursday, as the U.S. Federal Reserve's dour economic outlook
spooked investors.
The moves arrested the greenback's initial slide after the
Fed's policy stance, projecting rates near zero for years, was
even more accommodative than expected. The Australian dollar AUD=D3 retreated from an overnight
11-month high and fell as much as half a percent to $0.6966. The
New Zealand dollar NZD=D3 gave up a four-and-a-half month high
and fell 0.3% to $0.6516. AUD/
The yen JPY= rose marginally to 106.90, its highest since
mid May. Though the euro - which hit a three month peak
overnight - held firm, pointing to the possibility of more
downside to come for the dollar once the dust settles.
The single currency EUR= last bought $1.1382.
Fed policymakers projected the U.S. economy to shrink 6.5%
this year and the unemployment rate to be 9.3% at year's end.
"It is a long road," Fed Chair Jerome Powell said via video
link on Wednesday.
"We can use our tools to support the labour market and the
economy, and we can use them until we fully recover," he said.
That was a gloomier view than many in the market have
gravitated towards in recent days and sent investors out of
stocks, away from riskier currencies and in to bonds and the
dollar.
"That's been the follow-through, and it's played into a
broad rebound in the dollar," said Rodrigo Catril, FX analyst at
National Australia Bank in Sydney.
"But the takeaway is the Fed remains fully committed to its
ultra easy monetary polices," he said. "That should be
supportive for risk assets, and on a structural basis we still
think the U.S. dollar is embarking on a cyclical downturn."
Neither Powell nor the Fed's statement brooked any
suggestion that the central bank's massive liquidity injections
would be waning any time soon, with the statement promising bond
buying to continue "at least at the current pace".
Powell also said the question remains open as to whether the
Fed will use yield curve controls, reinforcing expectations that
it is gearing up to do so and pressing benchmark 10-year yields
back down under 0.8%. Against a basket of currencies =USD the dollar was steady
at 96.050, just above a three-month low hit on Tuesday. Sterling
GBP= held at $1.2738, just above its 200-day moving average.
Markets are looking ahead to U.S. jobless claims data due at
1230 GMT. A slight slowdown in jobless claims is expected,
though some traders might be primed for a positive surprise
after Friday's payrolls report showed a completely unexpected
easing in the jobless rate.