FOREX-Dollar hangs on as currency market waits for Powell

* Dollar makes modest gains even as stocks rise
* Powell speech seen as crucial in dollar's next move
* German IFO nervously eyed after soft PMI data
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Tom Westbrook
SINGAPORE, Aug 25 (Reuters) - The dollar held firm on
Tuesday, shrugging off selling pressure from a move higher in
equities, as investors seemed to temper their bearish bets
against the greenback ahead of a Thursday speech from U.S.
Federal Reserve Chair Jerome Powell.
The dollar, which often falls when stocks rise as investors
seek out riskier currencies, had inched higher overnight
-repelling the Australian dollar back under 72 U.S. cents and
pushing the euro below $1.18.
It hung on to those gains early in the Asia session and the
Aussie AUD=D3 last traded at $0.7162 and the euro EUR=EBS at
$1.1791. It was steady on the yen JPY= at 105.97 per dollar.
Fed Chair Powell on Thursday addresses a virtual Jackson
Hole symposium with the theme "Navigating the Decade Ahead:
Implications for monetary policy." Investors expect he might
address the bank's strategy - especially its 2% inflation
target, with speculation that could become an average rather
than nominal aim.
"If we don't get dovishness, I expect you might actually get
rates rising and pop up higher in the U.S. dollar," said Westpac
FX analyst Imre Speizer.
"The dollar has had a massive fall since March," he said. "I
think what we're seeing now is any excuse to buy it back as the
punters who have been short all the way down get quite nervous
and take the money off the table."
A small overnight rise in yields also supported the dollar
and against a basket of currencies =USD it held the line at
93.282, about 1.3% higher than a two-year trough it hit a week
ago. US/
It is about 9.4% below its March peak, though there are
signs its decline is slowing as it is broadly steady in August.
Net bets against the dollar eased from a nine-year high last
week and the U.S. currency has made ground broadly in recent
days. Sterling GBP= was pressured back below $1.31 to last fetch
$1.3071, and not helping was lack of progress in the latest
round of Brexit talks with the European Union.
The oil-sensitive Canadian dollar CAD=D3 fell about 0.3%
overnight to 1.3238 per U.S. dollar, even though oil prices
rose. The New Zealand dollar NZD=D3 has been unable to trade
above 66 cents for a week and last sat at $0.6524. AUD/
Elsewhere the Indian rupee INR= had on Monday jumped
nearly 1% to a five-month high as traders were surprised by the
absence of central bank dollar buying.
Besides Powell's speech, investors are also looking ahead to
Germany's IFO Business Climate index, due at 0800 GMT, and
expecting a small rise.
U.S. August consumer confidence figures are also due at 1400
GMT and another small rise is expected. Softer-than-forecast
data on both continents last week suggests there is downside
risk on the data, which could send the euro in either direction.
"We expect more consolidation in euro/dollar this week
because of early signs the Eurozone economic recovery is losing
momentum," said Commonwealth Bank of Australia currency analyst
Kim Mundy in a note.
"Rising coronavirus infections in some European countries is
a key downside risk to the Eurozone's growth outlook."