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FOREX-Dollar slides on Fed shift; yen surges after Abe resignation

    * Dollar drops after shift in Fed policy
    * Yen jumps after Abe resignation
    * Graphic: World FX rates in 2020 tmsnrt.rs/2RBWI5E

    By April Joyner
    NEW YORK, Aug 28 (Reuters) - The dollar fell on Friday as
the U.S. Federal Reserve's new policy framework suggested that
interest rates would remain low, while the yen surged after
Japanese Prime Minister Shinzo Abe announced his resignation.
    The yen significantly strengthened against the
dollar after the news that Abe, Japan's longest serving prime
minister, would step down due to worsening health.
    Concerns about a possible shift away from Abe's expansionary
economic policy, known as Abenomics, drove the move in the
safe-haven currency, investors said.
    The dollar was last down 1.0% against the yen at 105.45.
    "You're seeing yen strength on a little bit of uncertainty,"
said Lou Brien, strategist at DRW Trading in Chicago. "Abenomics
has been one of the more influential economic strategies."
    The greenback resumed its slide against a basket of major
currencies in the wake of Fed Chair Jerome Powell's remarks at
the virtual Jackson Hole conference. Powell said the U.S.
central bank would seek to keep inflation at 2%, on average, so
that periods of too-low inflation would likely be followed by an
effort to lift inflation above 2% for some time.
    In practice, market participants expect that this means the
current ultra-low rates will stay lower for longer, thereby
pressuring the dollar. After recovering from an initial slide on
Thursday immediately after Powell's speech, the dollar weakened
once again overnight.
    The dollar index was last 0.5% lower at 92.513.
    As the dollar weakened, the euro climbed 0.4% to
$1.1875.
    The euro's ascent puts it closer to a technical level of
$1.19, said Brien, which it has tested periodically over the
last month.
    "If it goes through it, it could be a significant moment,"
he said. "The (Fed's) new stance on inflation gives it an
opportunity to retest it."
    Currency markets were broadly pro-risk. The New Zealand
dollar hit its highest against the U.S. dollar since
January while the Australian dollar rose to its highest since
December 2018.
    The U.S. dollar also lost around 1.0% to the Norwegian crown
 and 0.8% to the Swedish crown.
    
    ========================================================
    Currency bid prices at 10:19AM (1419 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1875        $1.1821     +0.46%         +5.93%      +1.1919     +1.1812
 Dollar/Yen       JPY=        105.4500       106.5500    -1.03%         -3.13%      +106.9400   +105.2100
 Euro/Yen         EURJPY=     125.25         125.96      -0.56%         +2.71%      +126.7500   +125.2000
 Dollar/Swiss     CHF=        0.9058         0.9088      -0.33%         -6.41%      +0.9102     +0.9025
 Sterling/Dollar  GBP=        1.3287         1.3198      +0.67%         +0.21%      +1.3320     +1.3187
 Dollar/Canadian  CAD=        1.3110         1.3123      -0.10%         +0.95%      +1.3132     +1.3047
 Australian/Doll  AUD=        0.7333         0.7258      +1.03%         +4.44%      +0.7349     +0.7256
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.0759         1.0744      +0.14%         -0.86%      +1.0768     +1.0743
 Euro/Sterling    EURGBP=     0.8938         0.8954      -0.18%         +5.73%      +0.8974     +0.8936
 NZ               NZD=        0.6714         0.6637      +1.16%         -0.33%      +0.6728     +0.6631
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        8.8187         8.9151      -1.08%         +0.46%      +8.9218     +8.7781
 Euro/Norway      EURNOK=     10.4740        10.5370     -0.60%         +6.47%      +10.5530    +10.4530
 Dollar/Sweden    SEK=        8.6506         8.7160      -0.39%         -7.45%      +8.7355     +8.6100
 Euro/Sweden      EURSEK=     10.2749        10.3156     -0.39%         -1.86%      +10.3215    +10.2602
 
 (Reporting by April Joyner; Additional reporting by Elizabeth
Howcroft in London and Swati Pandey in Sydney)
  
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