FOREX-Data boosts euro, dollar dips before Fed's Powell speaks this week

    * Graphic: World FX rates in 2020

 (Adds details, updates prices; previous LONDON)
    By Karen Brettell
    NEW YORK, Aug 25 (Reuters) - The euro gained against the dollar on Tuesday after data showed improving
German business morale, and as investors waited on comments from Federal Reserve Chairman Jerome Powell on
Thursday about the U.S. central bank's policy framework review.
    A German business climate index rose more than expected in August as both manufacturing and services
picked up steam, boosting hopes that Europe's largest economy is set for a strong recovery following the
massive coronavirus pandemic shock.
    It is "another data point that helps keep the euro at this stretched level," said Kit Juckes, macro
strategist at Societe Generale.
    The major focus for the dollar this week will be whether the Fed's Powell signals that the U.S.
central bank will shift its inflation target to an average. This would allow inflation to rise higher than
previously before the Fed raises rates, which would be a further negative for the dollar.
    "The expectation is that there might be a subtle shift in how much the Fed will be willing to tolerate
higher inflation in the future," said Minh Trang, senior FX trader at Silicon Valley Bank in Santa Clara,
    Rock bottom interest rates and concerns about a more dovish inflation policy have reduced the appeal
of the U.S. currency, while a relatively high level of COVID-19 infections is also casting doubts on the
speed of the U.S. economic recovery relative to other regions including Europe.
    The euro EUR+ was last up 0.33% on the day at $1.1826, after reaching $1.1965 on Monday, the highest
since May 2018.
    The dollar index against a basket of currencies fell 0.21% to 93.08.
    The dollar also weakened against riskier currencies, but gained against the safe haven Japanese yen
after the United States and China said they are still committed to their Phase One trade deal.

    The Australian dollar rose 0.29% to $0.7182.
    The greenback rose 0.47% against the yen to 106.47 yen.
    Currency bid prices at 9:58AM (1358 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar      EUR=        $1.1826        $1.1787     +0.33%         +5.50%      +1.1844     +1.1784
 Dollar/Yen       JPY=        106.4700       105.9700    +0.47%         -2.20%      +106.4900   +105.8800
 Euro/Yen         EURJPY=     125.92         124.94      +0.78%         +3.26%      +126.0300   +124.9500
 Dollar/Swiss     CHF=        0.9088         0.9117      -0.32%         -6.10%      +0.9126     +0.9079
 Sterling/Dollar  GBP=        1.3129         1.3063      +0.51%         -0.98%      +1.3169     +1.3056
 Dollar/Canadian  CAD=        1.3189         1.3216      -0.20%         +1.56%      +1.3239     +1.3177
 Australian/Doll  AUD=        0.7182         0.7161      +0.29%         +2.29%      +0.7191     +0.7152
 Euro/Swiss       EURCHF=     1.0751         1.0749      +0.02%         -0.93%      +1.0768     +1.0746
 Euro/Sterling    EURGBP=     0.9007         0.9021      -0.16%         +6.54%      +0.9037     +0.8984
 NZ               NZD=        0.6532         0.6525      +0.11%         -3.03%      +0.6558     +0.6516
 Dollar/Norway    NOK=        8.9527         9.0021      -0.55%         +1.99%      +9.0123     +8.9277
 Euro/Norway      EURNOK=     10.5890        10.6160     -0.25%         +7.63%      +10.6250    +10.5580
 Dollar/Sweden    SEK=        8.7672         8.7877      +0.08%         -6.21%      +8.7958     +8.7333
 Euro/Sweden      EURSEK=     10.3690        10.3612     +0.08%         -0.96%      +10.3835    +10.3300
 (Reporting by Karen Brettell; Additional reporting by Olga Cortaga in London; Editing by Will Dunham)