FOREX-Dollar gains as Powell rejects sub-zero rates, Aussie hurt by jobs plunge

* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
* Powell dashes negative rate speculation
* Aussie wilts after jobs data
* Coronavirus clouds economic outlook

By Stanley White
TOKYO, May 14 (Reuters) - The dollar held gains against
major currencies on Thursday after U.S. Federal Reserve Chairman
Jerome Powell dismissed speculation that policymakers will adopt
negative interest rates.
Among Asian currencies, the Australian dollar fell on data
showing the country shed jobs in April at the fastest pace on
record, suggesting more monetary and fiscal easing may be needed
to support the economy.
The focus will shift to economic data from the United States
and Europe in the next two days for more clues on the depth of
the downturns there, while investors will closely watch China's
activity gauges for signs of how long it may take to emerge from
the sharp shock caused by the coronavirus outbreak.
"The dollar managed to bounce back after Powell's comments
on negative rates, but now the dollar's bias is fairly neutral,"
said Takuya Kanda, general manager of the research department at
Gaitame.com Research Institute in Tokyo.
"There could be some safe-have flows into the dollar, but
everyone is facing the same economic problems caused by the
coronavirus."
The dollar traded at $1.0805 against the euro EUR=D3 on
Thursday following a 0.3% gain in the previous session.
Against the pound GBP=D3 , the greenback rose to a
five-week high of $1.2203.
The dollar bought 0.9733 Swiss franc CHF=EBS after gaining
0.3% on Wednesday.
Powell is the latest in a parade of policymakers to brush
off the notion that they might push rates into negative
territory, after Fed futures began pricing a small chance of
sub-zero U.S. rates within the next year.
"The committee's view on negative rates really has not
changed. This is not something that we are looking at," Powell
said on Wednesday, referring to the Fed's policy-setting Federal
Open Market Committee. Powell spoke in response to a question after offering a
sobering assessment of U.S. economic outlook in a closely
watched speech.
The United States and other countries are easing
restrictions to allow factories and shops to open again for
business, but there are significant risks of a second wave of
infections and a full-fledged economic recovery is likely to
remain distant until a vaccine for the coronavirus is available.
U.S. data on weekly jobless claims due later Thursday and a
survey on U.S. manufacturing due Friday should offer more clues
about the economic outlook.
The Australian dollar AUD=D3 fell 0.3% to $0.6437 after
data showed unemployment increased by 594,300 in April, slightly
more than the median estimate. The jobless rate rose to a
five-year high. Across the Tasman Sea, the New Zealand dollar NZD=D3 fell
0.23% to $0.5987, adding to a decline of more than 1% on
Wednesday after the Reserve Bank of New Zealand flagged the
possibility of negative interest rates.
New Zealand's government unveiled a record NZ$50 billion
($30 billion) fund in its budget on Thursday to restore an
economy hit by the coronavirus pandemic, but warned it may not
be enough to stop thousands from losing jobs and businesses
shutting. The yen JPY=EBS edged up to 106.88 against the U.S. dollar
as some traders bought the Japanese currency on risk aversion
after Nikkei shares .N225 fell to a one-week low.
The yen also drifted higher against the antipodean
currencies AUDJPY= NZDJPY= and the euro EURJPY= .
Many investors await China's release on Friday of data on
industrial production, retail sales and investment to measure
how quickly the world's second-largest economy is recovering
from its first contraction in decades in the first quarter.
In the onshore market, the yuan CNY=CFXS eased slightly to
7.0990 per dollar.
The novel coronavirus emerged in China late last year and
has since spread across the globe, paralysing economic activity.
Traders in the euro are also focused on the release of
preliminary first-quarter gross domestic product data on Friday
to assess the scale of the damage caused by the outbreak.