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FOREX-Dollar gains after Fed shifts inflation target as expected

    * Graphic: World FX rates in 2020

 (Recasts with Powell comments, adds quotes, updates prices;
previous LONDON)
    By Karen Brettell
    NEW YORK, Aug 27 (Reuters) - The U.S. dollar gained on
Thursday in choppy trading after Federal Reserve Chairman Jerome
Powell said, as widely expected,  that the U.S. central bank
would roll out an aggressive new strategy to lift U.S.
employment and inflation.
    Under the new approach, the U.S. central bank will seek to
achieve inflation averaging 2% over time, offsetting below-2%
periods with higher inflation "for some time," and to ensure
employment does not fall short of its maximum level.

    “The market expected most of this,” said Marc Chandler,
chief market strategist at Bannockburn Global Forex in New York.
    There are doubts about whether the Fed will be able to lift
inflation, despite the new target.
    “The Fed hasn’t achieved its inflation targets since 2012,
and so now they’re saying now we‘re serious about it ... don’t
think that’s what creates inflation, or really the inflation
expectations,” Chandler said.
    The dollar index initially sank on the announcement,
before rebounding to last be up 0.53% on the day at 93.31.
    The euro fell 0.51% to $1.1769.
    Longer-term, if the Fed is able to increase price pressures
but also leave rates near zero for longer, the policy would be
negative for the dollar.
    “What’s going to happen is when you have all the other
central banks starting to pull back their stimulus, starting to
show signs of tightening, the Fed is going to lag on that, said
Edward Moya, senior market analyst at OANDA in New York. 
    “You’re going to see that interest rate differential not be
in the dollar’s favor. It’s just providing a longer-term bearish
outlook for the greenback,” Moya said.
    Data on Thursday showed that the number of Americans filing
new claims for unemployment benefits hovered around 1 million
last week, suggesting the labor market recovery was stalling as
the COVID-19 pandemic drags on and financial aid from the
government dries up.
    The British pound reached an eight-month high of
$1.3283 against the greenback earlier on Thursday, before
falling back to $1.3170.
    Currency bid prices at 10:15AM (1415 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar      EUR=        $1.1769        $1.1829     -0.51%         +4.99%      +1.1900     +1.1763
 Dollar/Yen       JPY=        106.3200       105.9800    +0.32%         -2.33%      +106.4100   +105.6200
 Euro/Yen         EURJPY=     125.14         125.37      -0.18%         +2.62%      +125.7500   +125.1500
 Dollar/Swiss     CHF=        0.9119         0.9081      +0.42%         -5.78%      +0.9122     +0.9038
 Sterling/Dollar  GBP=        1.3170         1.3208      -0.29%         -0.67%      +1.3283     +1.3164
 Dollar/Canadian  CAD=        1.3152         1.3139      +0.10%         +1.28%      +1.3166     +1.3105
 Australian/Doll  AUD=        0.7221         0.7231      -0.14%         +2.85%      +0.7290     +0.7218
 Euro/Swiss       EURCHF=     1.0732         1.0742      -0.09%         -1.11%      +1.0760     +1.0731
 Euro/Sterling    EURGBP=     0.8935         0.8954      -0.21%         +5.69%      +0.8965     +0.8930
 NZ               NZD=        0.6605         0.6619      -0.21%         -1.94%      +0.6674     +0.6605
 Dollar/Norway    NOK=        8.9655         8.8640      +1.15%         +2.13%      +8.9757     +8.8396
 Euro/Norway      EURNOK=     10.5540        10.5150     +0.37%         +7.28%      +10.5588    +10.4926
 Dollar/Sweden    SEK=        8.7604         8.7115      +0.03%         -6.28%      +8.7749     +8.6621
 Euro/Sweden      EURSEK=     10.3145        10.3116     +0.03%         -1.48%      +10.3290    +10.2973