FOREX-Dollar holds advantage as Powell quashes negative rates, data in focus

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

By Stanley White
TOKYO, May 14 (Reuters) - The dollar held onto gains against
major currencies on Thursday after U.S. Federal Reserve Chairman
Jerome Powell dismissed speculation that policymakers will adopt
negative interest rates.
The Australian dollar was under pressure before
closely-watched data on the jobs market, which may help
determine how much more monetary and fiscal easing is necessary
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
activity gauges for signs on 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 $1.0818 against the euro EUR=D3 on
Thursday following a 0.3% gain in the previous session.
Against the pound GBP=D3 , the greenback was quoted at
$1.2238, close to a five-week high.
The dollar bought 0.9722 Swiss franc CHF=EBS after gaining
0.3% on Wednesday.
The greenback was little changed at 106.91 yen JPY=EBS .
Powell became 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 eased slightly to $0.6449 as
traders braced for data at 0130 GMT expected to show a large
increase in unemployment (Reuters poll forecast 575,000) due to
the coronavirus pandemic, which would bolster expectations for
further stimulus measures.
Across the Tasman Sea, the New Zealand dollar NZD=D3
traded at $0.5991. The kiwi tumbled by more than 1% on Wednesday
after the Reserve Bank of New Zealand flagged the possibility of
negative interest rates.
New Zealand's government is expected to present its budget
later today, which will offer fiscal stimulus to offset the
economic damage caused by the pandemic.
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.
The novel coronavirus first 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.