* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
* Traders look to Powell's comments for policy clues
* Futures show strong expectations for Fed rate cuts
* Powell may temper his message on rates
* New Zealand dollar jumps after RBNZ Orr
By Stanley White
TOKYO, Aug 23 (Reuters) - The dollar held steady in Asia on
Friday on expectations U.S. Federal Reserve Chairman Jerome
Powell would stick with his message that the central bank has
not entered a prolonged monetary easing cycle.
Powell gives a highly-awaited speech later Friday at a
meeting of central bankers in Jackson Hole, but doubts have
emerged after two Fed officials said they saw no reason to cut
interest rates again without new signs of economic weakness.
In Asian currency markets, the New Zealand dollar jumped
after the Pacific nation's central bank chief said he was
"pleased" with where interest rates were at, hosing down
expectations of more immediate rate cuts after this month's
aggressive easing.
Currency markets have in recent months been driven by global
central banks' shift to much more accommodative policy settings
as economic demand slows and trade disputes intensify.
Expectations that the Fed will cut rates at its next meeting
in September are still very high, according to interest rate
futures, but the currency market is likely to react if the tone
of Powell's comments do not match these dovish expectations.
"The rates market is well ahead of the Fed in pricing in
aggressive rate cuts, but Powell may not be as dovish as the
market is pricing in," said Masafumi Yamamoto, chief currency
strategist at Mizuho Securities.
"Powell will keep the option of rate cuts on the table, but
won't lean too strongly in that direction. This would be
supportive for the dollar."
The dollar was little changed at 106.48 yen JPY=EBS on
Friday. The dollar fell 0.2% versus the yen on Thursday
following slightly weak data on the U.S. manufacturing sector.
For the week, the greenback was on course for a 0.1% gain
versus the yen.
The dollar index .DXY against a basket of six major
currencies was little changed at 98.170.
The New Zealand dollar NZD=D3 rose 0.4% to $0.6391 and
0.4% to 68.06 yen NZDJPY= . Reserve Bank of New Zealand
Governor Adrian Orr told Bloomberg TV he can afford to wait on
monetary policy after stunning investors earlier this month with
a sharp 50-basis-point rate cut. In the United States, Philadelphia Federal Reserve Bank
President Patrick Harker and Kansas City Federal Reserve Bank
President Esther George both said on Thursday they saw no
immediate need to cut rates.
Powell is likely to acknowledge later Friday that fallout
from the U.S.-China trade war may worsen a global economic
slowdown and ultimately make more U.S. rate cuts necessary.
But he is expected also to try to ensure he is not seen as
bowing before repeated attacks from President Donald Trump for
not easing policy further.
Interest rate futures traders are pricing in a 91%
probability of a rate cut at the Fed's September meeting,
according to the CME Group's FedWatch tool. In July the Fed cut
rates for the first time in a decade to 2.00%-2.25%.
The dollar edged to a three-week high of 0.9846 Swiss franc
CHF=EBS on Friday.
The greenback was on course for a 0.7% gain against the
safe-haven Swiss franc this week in a tentative sign of an
improvement in risk sentiment.