GLOBAL MARKETS-Dollar gains, shares extend rally before Fed release

(Adds U.S. market open; previous LONDON)
* BA owner gains on shorter quarantine hopes
* Dollar claws back from 27-month low
* Graphic: 2020 asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh

By Herbert Lash
NEW YORK, Aug 19 (Reuters) - The dollar and global equities
edged higher on Wednesday, with stocks on Wall Street extending
their record-breaking rally, as investors set aside new
U.S.-China tensions for details later in the day on Federal
Reserve efforts to keep the economy humming.
The dollar index, which reflects its value against six
leading trading currencies, rose to hold just above a 27-month
low hit overnight, while gold fell below $2,000 an ounce, partly
in response to a pause in the greenback's slide.
Crude prices eased on concerns U.S. fuel demand faces a slow
recovery amid stalled talks on an economic stimulus package in
Washington and despite support from a bigger-than-expected
drawdown in U.S. crude stocks.
MSCI's benchmark for global equity markets .MIWD00000PUS
rose 0.13% to 574.05 and Europe's broad FTSEurofirst 300 index
.FTEU3 added 0.41% to 1,430.74.
The dollar index =USD rose 0.192% and spot gold prices
XAU= fell -0.85% to $1,983.86 an ounce.
Minutes from the Fed's last meeting of its Federal Open
Market Committee are due at 2 p.m. (1800 GMT), with investors
seeking hints of further action that the U.S. central bank could
take in September. No change in interest rate policy is expected
until end-2021.
The Fed's actions to blunt the impact of the coronavirus
pandemic have helped lift riskier assets to all-time highs but
have reduced demand for safe-havens and battered the dollar.
The likelihood of further dollar weakness could prompt gold
to "carve out a more sustained presence above $2,000 and reach
new record highs," FXTM market analyst Han Tan said.
"The release of the latest FOMC minutes could offer another
gust of wind in bullion bulls' sails, especially if there is an
obvious signal that the Fed is willing to tolerate faster U.S.
inflation," Tan added.
The S&P 500 and Nasdaq scaled new highs after the open as
results from retailers Target and Lowe's trounced estimates,
after the S&P 500 on Tuesday completed its fastest recovery ever
from a bear market to confirm a bull market.
The Dow Jones Industrial Average .DJI rose 0.39%, the S&P
500 .SPX gained 0.15% and the Nasdaq Composite .IXIC added
0.07%.
Big-box chain Target Corp TGT.N jumped 12% after posting
its best quarterly comparable sales growth and online revenue
that nearly tripled. In Europe, travel and leisure shares rose, with British
Airways owner International Airlines Group ICAG.L up 5.3% on a
British plan to use COVID-19 testing at London's Heathrow
Airport to help cut the number of days travelers have to spend
in quarantine. Overnight, MSCI's broadest index of Asia-Pacific shares
outside of Japan .MIAPJ0000PUS fell 0.2%, retreating from a
seven-month high hit after the S&P 500's .SPX record.
The euro EUR= fell 0.01% to $1.1928 while the Japanese yen
JPY= weakened 0.13% versus the greenback at 105.52 per dollar.
Brent crude futures LCOc1 fell $0.58 to $44.88 a barrel.
U.S. crude futures CLc1 slid $0.46 to $42.43 a barrel.

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