FOREX-Dollar nears 3-week highs as Powell squashes negative rate hopes

* For a graphic on world forex rates, click http://tmsnrt.rs/2egbfVh

By Saikat Chatterjee
LONDON, May 14 (Reuters) - The dollar climbed towards a
three-week high on Thursday as risk appetite deteriorated
broadly after Federal Reserve Chairman Jerome Powell dismissed
speculation about negative interest rates.
Though Powell is the latest in a parade of policymakers to
brush off the notion that they might push rates into negative
territory, Fed futures 0#FF: were pricing a small chance of
sub-zero U.S. rates by March next year. While the Fed chairman also urged more fiscal stimulus to
support the economy, Mark Haefele, chief investment officer at
UBS Global Wealth Management said the ongoing partisan tensions
suggest additional stimulus is "unlikely to immediately
materialize".
Powell's comments sent investors scurrying to the relative
safe-haven appeal of the greenback while U.S. stocks posted
their biggest two-day fall in more than three weeks.
Against a basket of its rivals =USD , the dollar edged
0.15% higher at 100.30, hovering below a three-week high of
100.44 tested earlier this week.
"The downbeat message from Powell has contributed to more
risk off trading conditions overnight which is also helping to
support the U.S. dollar," MUFG strategists said.
Among major currencies, the Australian dollar led losers
after data showed 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 Aussie 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.
The pound GBP=D3 also tumbled below the $1.22 line for the
first time in more than five weeks after Wednesday's data showed
Britain's economy shrank by a record 5.8% in March as the
coronavirus crisis escalated. Investors are now focused on data from the United States and
Europe in the next two days for more clues on the depth of the
downturns there. U.S. initial jobless claims data is due on
Thursday while the eurozone reports first-quarter GDP data on
Friday.