FOREX-Dollar rises after Fed's Evans comments on quantitative easing

    * Fed's Evans floats hike, says QE may not answer economic woes
    * Fed's Powell says will do more measures if needed
    * Graphic: World FX rates in 2020

 (Updates prices, adds commentary, recasts throughout)
    By Sinéad Carew and Gertrude Chavez-Dreyfuss
    NEW YORK, Sept 22 (Reuters) - The dollar rose to an eight-week high on Tuesday, after a top Federal
Reserve official struck a hawkish tone by mentioning the prospect of raising rates, further entrenching
investors who were already in a risk-off mood.
    The euro touched an eight-week low against the dollar before paring losses, while the Swiss franc fell
to a seven-week trough. Sterling hovered around a two-month low on worries about the impact of virus
    Speaking at a virtual meeting of the London-based Official Monetary and Financial Institutions Forum,
Chicago Fed President Charles Evans said the U.S. economy risked a longer, slower recovery, if not an
outright recession without another fiscal support package. 
    Evans - due to become a voter on the Federal Open Market Committee in 2021 - said the Fed still needed
to discuss its new average inflation target but that it "could start raising rates before we start
averaging 2%." And he said more quantitative easing may not provide another lift to the U.S. economy.

    "All we've been hearing from the Fed for the last few months is we're not going to hike rates at any
point in the foreseeable future. Then Evans came in and challenged that narrative, so the market got
caught off-guard," said Erik Nelson, macro strategist at Wells Fargo Securities in New York, also noting
that Evans is usually seen as one of the more dovish Fed officials. 
     Edward Moya, senior market analyst at OANDA in New York described Evans' comments as "extremely
    "The sooner we get to the other side of this virus, you're going to see rate hike expectations jump
up, and that should further drive this dollar rebound," said Moya. 
    Meanwhile, Fed Chair Jerome Powell told a congressional panel on Tuesday that while America's economy
has shown "marked improvement" since the coronavirus pandemic drove it into recession, the path ahead
remains uncertain and the U.S. central bank will do more if needed.
    Both Evans and Powell spoke of the need for fiscal stimulus to help the economy.
    This highlighted concerns among market participants that the chances of an aid agreement are dimming
as Washington lawmakers turn their attention to a battle over the nomination of a Supreme Court justice to
replace the late Justice Ruth Bader Ginsburg.
    "There's a perfect storm of negative headlines out there for the economy, which is starting to stream
through to financial markets," said Wells Fargo's Nelson. "The shift in focus for U.S. senators reduces
the hope for a fiscal stimulus package." 
    Before Evans spoke, the dollar had already been climbing in earlier trading as investors looked for
safety after parts of Europe imposed restrictions due to surging coronavirus cases.  
    Sterling traded around two-month lows after gyrating in volatile trading after British Prime Minister
Boris Johnson told people to work from home whenever possible and ordered bars and restaurants to close
early, with the new restrictions possibly lasting six months, as the tackled the virus outbreak.

    The greenback was last up 0.47% at 94.027 versus a basket of currencies. It hit a high of
94.086, its strongest level since late July.
    The euro was down 0.6% against the dollar at $1.1703, after falling below a key $1.17 level,
its lowest since late July as well.
    The dollar also gained against the yen, rising for a second day in a row. It was last up 0.32 at
104.97 yen.
    Currency bid prices at 3:18PM (1918 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar      EUR=        $1.1703        $1.1769     -0.56%         +4.40%      +1.1773     +1.1693
 Dollar/Yen       JPY=        104.9700       104.6400    +0.32%         -3.57%      +105.0700   +104.4100
 Euro/Yen         EURJPY=     122.85         123.17      -0.26%         +0.74%      +123.2700   +122.6600
 Dollar/Swiss     CHF=        0.9198         0.9143      +0.60%         -4.96%      +0.9208     +0.9138
 Sterling/Dollar  GBP=        1.2730         1.2814      -0.66%         -3.99%      +1.2866     +1.2712
 Dollar/Canadian  CAD=        1.3301         1.3306      -0.04%         +2.43%      +1.3345     +1.3283
 Australian/Doll  AUD=        0.7166         0.7223      -0.79%         +2.07%      +0.7235     +0.7155
 Euro/Swiss       EURCHF=     1.0767         1.0762      +0.05%         -0.78%      +1.0774     +1.0746
 Euro/Sterling    EURGBP=     0.9193         0.9183      +0.11%         +8.74%      +0.9220     +0.9145
 NZ               NZD=        0.6634         0.6666      -0.48%         -1.51%      +0.6687     +0.6623
 Dollar/Norway    NOK=        9.3548         9.2791      +0.82%         +6.57%      +9.3791     +9.2725
 Euro/Norway      EURNOK=     10.9504        10.9300     +0.19%         +11.31%     +10.9880    +10.9135
 Dollar/Sweden    SEK=        8.9143         8.8414      +0.20%         -4.65%      +8.9219     +8.8403
 Euro/Sweden      EURSEK=     10.4343        10.4134     +0.20%         -0.35%      +10.4425    +10.3845
 (Additional reporting by Gertrude Chavez-Dreyfuss in New York; Editing by Jonathan Oatis and Chris Reese)