* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
* Markets waiting for Powell's speech at Jackson Hole
* Fed reluctant to embark on easing cycle - Fed minutes
* Futures show rate cut expectations remain high
* Brexit confusion undermines sterling
By Stanley White
TOKYO, Aug 22 (Reuters) - The dollar held gains on Thursday
after minutes from the Federal Reserve's last policy meeting
hosed down some aggressive expectations the central bank would
embark on a series of deep interest rate cuts.
Asian currencies are expected to trade in tight ranges on
Thursday ahead of U.S. Federal Reserve Chairman Jerome Powell's
speech at Jackson Hole on Friday for signs of just how far the
U.S. central bank is prepared to lower rates.
His comments are of particular interest after an inversion
in the Treasury yield curve highlighted the risk that the U.S.
economy may fall into recession. While the Fed's minutes
tempered some dovish expectations, markets still broadly expect
further rate cuts as growth slows.
"Yields are supportive of the dollar for now, but this may
not last after Powell's speech," said Junichi Ishikawa, senior
foreign exchange strategist at IG Securities in Tokyo.
"Additional rate cuts are thoroughly priced in. If Powell
sounds slightly hawkish, stocks could sell off, which would hurt
the dollar against safe-haven currencies like the yen."
At the Fed's last meeting in July, the U.S. central bank cut
interest rates for the first time in a decade to 2.00-2.25%. The
Fed next meets Sept. 17-18.
The dollar held steady at 107.79 yen JPY=EBS following a
0.36% gain on Wednesday, its biggest since Aug. 13.
Against the Swiss franc CHF=EBS , the dollar traded at
0.9822, close to a two-week high of 0.9831.
Fed policymakers were deeply divided over whether to cut
interest rates last month but were united in wanting to signal
they were not on a preset path to more cuts. However, this message is not likely to sit well with U.S.
President Donald Trump, who has repeatedly bashed Powell for not
cutting interest rates more aggressively.
Benchmark 10-year Treasury yields < US10YT=RR> gained after
the minutes, but interest rate futures are pricing in a 100%
probability of a rate cut at the Fed's September meeting, a 75%
chance of an additional cut in October, and a 48% likelihood of
another cut in December, the CME's FedWatch tool shows.
The Fed and other central banks are cutting interest rates
to contain a global economic slowdown caused by a prolonged
trade war between the United States and China.
Sterling traded a tad lower at 91.89 pence per euro
EURGBP= , on course for its second day of losses, as
uncertainty about Britain's divorce from the European Union
weighed on the pound.
Against the greenback, sterling GBP=D3 was little changed
at $1.2132.
French President Emmanuel Macron said on Wednesday there
would be no renegotiation of the terms for Britain's exit from
the EU.
British Prime Minister Boris Johnson is due to meet Macron
in Paris on Thursday. German Chancellor Angela Merkel challenged
Britain to come up with alternatives to the Irish border
backstop within 30 days after meeting Johnson on Wednesday.
Johnson, who won the premiership a month ago, is betting the
threat of "no-deal" Brexit turmoil will convince Merkel and
Macron that the EU should do a last-minute deal to remove the
Irish backstop.