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FOREX-Dollar rebounds after Fed minutes coy on policy strategy

* Overnight bounce was dollar’s best daily jump since March

* Short squeeze exaggerated move - analysts

* AUD back under 72c, EUR below $1.19 and both steady in Asia

* Graphic: World FX rates in 2020 tmsnrt.rs/2RBWI5E

SINGAPORE, Aug 20 (Reuters) - The dollar clung to overnight gains on Thursday, after minutes from last month’s U.S. Federal Reserve meeting gave few clues about whether an even more dovish shift in its policy framework is possible in the autumn, disappointing some dollar bears.

A heavily shorted greenback put on its biggest one-day surge since March after the release, hitting 93.159 against a basket of currencies, about 1% above Tuesday’s two-year trough. The move wiped out earlier gains made by other majors.

Speculation has been rife the Fed will adopt an average inflation target, and seek to push inflation above 2% to make up for years it has run below, as part of a broader policy review.

But the minutes were vague on the issue and merely said “a number” of Fed members thought it would be helpful to make a revised statement on its policy strategy at some point, without providing details or timing.

After hitting an 18-month high of $0.7275 before the meeting, the Australian dollar tumbled back below 72 cents and last sat at $0.7186. The New Zealand dollar dropped almost 1.4% from its intraday high to sit at $0.6561.

The euro - the most stretched of all recent gainers on the greenback - fell 0.7% overnight to trade back below $1.19. It last sat at $1.1841. The pound was dumped back to $1.3103 and the dollar jumped 0.7% on the yen to 106.13.

“Traders were hoping (the minutes) would cement a clear consensus in the Fed’s ranks for a series of key changes in the 18 September meeting,” said broker Pepperstone’s head of research, Chris Weston.

“(But) there seems little consensus in the Fed collective to adopt an inflation-targeting regime, which is what so many have positioned for.”

The minutes also sounded pretty gloomy about the U.S. economy and skeptical about capping government bond yields as a means of encouraging recovery and investment - leading to a modest sell off in Treasuries.

The dollar’s rebound comes after short bets against the world’s reserve currency had risen to their largest since 2011 last week and long bets on the euro were at a record high, which has some investors feeling it could be short-lived blip.

“All that was needed to push up the dollar was a catalyst; the minutes provided the catalyst,” said Commonwealth Bank of Australia currency analyst Joe Capurso.

“Nevertheless, we still expect the dollar to track lower. The rest of the world economy, led by China, is recovering...we consider the Aussie’s fall overnight as a short term pothole along a road that trends higher.”

For the Fed, the focus now shifts to whether more will be revealed at the Aug. 27-28 virtual Jackson Hole symposium or at September’s meeting.

On Thursday investors expect China to keep its benchmark lending rate steady when it is fixed at 0130 GMT.

Later in the day, U.S. weekly jobless claims are expected to drop even further below one million, and markets are warily awaiting the Philadelphia Fed business index at 1230 GMT after a disappointing reading from New York earlier in the week. (Reporting by Tom Westbrook; Editing by Lincoln Feast.)

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