* Powell sticks to message of ultra-easy policy for some
time yet
* Recovery hopes boost commodity currencies and British
pound
* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
By Kevin Buckland
TOKYO, Feb 25 (Reuters) - The safe-haven U.S. dollar
languished near three-year lows versus riskier currencies on
Thursday as continued dovish signals from the Federal Reserve
stoked reflation bets.
The greenback sank to fresh lows against the Australian and
Canadian dollars, and held near lows set overnight against its
British and New Zealand peers.
Fed Chair Jerome Powell reiterated on Wednesday that the
central bank wouldn't adjust policy until the economy is clearly
improving, and will look through any near-term spike in
inflation. The remarks to the House of Representatives Committee
on Financial Services mirrored his testimony before the Senate
the day before. "Powell made it very clear that the improvement in the
economic outlook thus far will not instigate the Fed to tighten
monetary policy," National Australia Bank foreign exchange
strategist Rodrigo Catril wrote in a client note.
"The punchbowl ain't going anywhere anytime soon and the
policy backdrop should remain supportive for risk assets for
some time."
Easy financial conditions, the promise of fiscal stimulus
and an accelerating COVID-19 vaccine rollout have driven money
into what's known as the reflation trade, referring to bets on
an upswing in economic activity and prices.
Commodity-linked currencies are placed to benefit from a
pickup in global trade, while investors have also cheered
Britain's progress in recovering from the coronavirus pandemic.
"The dollar will probably weaken over time as economies pick
up and the reflation trade gets more attention," said Bart
Wakabayashi, Tokyo branch manager of State Street Bank and
Trust.
"We're seeing very strong upward pressure on prices in the
U.S. in particular."
Australia's dollar AUD=D4 traded at $0.79672 after earlier
touching a fresh three-year high of $0.7978.
The Canadian dollar CAD=D4 changed hands at its own
three-year high of C$1.2502 per U.S. dollar.
The New Zealand NZD=G4 was at $0.7434, just off
Wednesday's high of $0.7455.
Sterling GBP=D4 rose 0.1% to $1.4161 after pushing to the
cusp of $1.43 overnight for the first time since April 2018.
The euro EUR=EBS traded near the top of its recent range
at $1.2178, near the almost one-month high of $1.2180 touched
earlier this week.
The dollar strengthened though against other traditional
safe haven currencies, maintaining a two-day gain to trade at
105.875 yen JPY=EBS and holding near the three-month high of
90.945 Swiss francs CHF=EBS reached overnight.
========================================================
Currency bid prices at 0510 GMT
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR=EBS $1.2178 $1.2170 +0.06% -0.33% +1.2178 +1.2140
Dollar/Yen JPY=D3 105.8570 105.8600 +0.04% +2.53% +106.1250 +105.8800
Euro/Yen EURJPY= 128.91 128.79 +0.09% +1.57% +129.0600 +128.7900
Dollar/Swiss CHF=EBS 0.9060 0.9065 -0.04% +2.42% +0.9074 +0.9061
Sterling/Dollar GBP=D3 1.4159 1.4143 +0.12% +3.65% +1.4163 +1.4127
Dollar/Canadian CAD=D3 1.2501 1.2515 -0.10% -1.82% +1.2519 +1.2502
Aussie/Dollar AUD=D3 0.7966 0.7968 -0.01% +3.57% +0.7977 +0.7953
NZ NZD=D3 0.7431 0.7443 -0.13% +3.51% +0.7447 +0.7420
Dollar/Dollar
All spots FX=
Tokyo spots AFX=
Europe spots EFX=
Volatilities FXVOL=
Tokyo Forex market info from BOJ TKYFX
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World FX rates https://tmsnrt.rs/2RBWI5E
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