* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E (Adds quotes, updates prices; previous LONDON)
By Karen Brettell
NEW YORK, Sept 16 (Reuters) - The U.S. dollar fell on Wednesday ahead of the Federal Reserve's economic projections, and as optimism that the global economy is recovering reduced demand for the currency.
The Fed's projections will be watched for any new indications on when the U.S. central bank may lift rates from zero bound. Any details on its new inflation targeting policy and a possible shift towards buying more longer-dated Treasuries as part of its quantitative easing program are also in focus.
The Fed, however, may be running out of new ways to ease monetary conditions after Fed Chairman Jerome Powell last month announced a new inflation policy, which would allow price pressures to run higher than previously before raising rates. think the bar for a dovish surprise is quite high at this point, partly because the toolkit is somewhat limited," said Vassili Serebriakov, an FX strategist at UBS in New York.
The dollar index against a basket of currencies =USD fell 0.21% to 92.92.
Stronger Chinese data for August and optimism about a vaccine for the coronavirus helped boost risk sentiment this week, and reduced demand for the greenback.
"I would say the biggest impulse this week was the stronger activity data for the month of August from China, and maybe a bit of ongoing optimism about the vaccine," Serebriakov said.
Data on Tuesday showed that China's industrial output accelerated the most in eight months in August, while retail sales grew for the first time this year. are starting to embrace a new theme, which is that China is managing much, much better than anyone else," said Davis Hall, head of capital markets in Asia at Indosuez Wealth Management.
The offshore yuan CNH= gained to 6.7536, the strongest since May 2019.
U.S. data on Wednesday showed consumer spending slowed in August, with a key retail sales gauge unexpectedly declining. Japanese yen JPY= strengthened as far as 104.70 against the greenback, the strongest since July 31.
Japan's new Prime Minister Yoshihide Suga pledged on Wednesday that he will do his best to protect employment while also countering the coronavirus. euro EUR= rose 0.05% to $1.1851.
Sterling GBP= reversed earlier losses and rose 0.62% to $1.2966 in what would be its biggest daily rise in 2-1/2 weeks before a meeting of the Bank of England on Thursday, when policymakers may strike a downbeat assessment for the struggling economy. bid prices at 9:48AM (1348 GMT) Description
RIC
Last
U.S. Close Pct Change
YTD Pct
High Bid
Low Bid
Previous
Change
Session
Euro/Dollar
EUR=
$1.1851
$1.1845
+0.05%
+5.72%
+1.1882
+1.1830 Dollar/Yen
JPY=
104.8400
105.4300
-0.56%
-3.69%
+105.4400 +104.8200 Euro/Yen
EURJPY=
124.27
124.91
-0.51%
+1.89%
+125.0100 +124.2500 Dollar/Swiss
CHF=
0.9070
0.9080
-0.11%
-6.28%
+0.9094
+0.9056 Sterling/Dollar GBP=
1.2966
1.2886
+0.62%
-2.22%
+1.2994
+1.2876 Dollar/Canadian CAD=
1.3177
1.3181
-0.03%
+1.47%
+1.3200
+1.3155 Australian/Doll AUD=
0.7325
0.7301
+0.33%
+4.33%
+0.7343
+0.7289 ar
Euro/Swiss
EURCHF=
1.0751
1.0756
-0.05%
-0.93%
+1.0766
+1.0749 Euro/Sterling
EURGBP=
0.9139
0.9190
-0.55%
+8.10%
+0.9208
+0.9130 NZ
NZD=
0.6738
0.6721
+0.25%
+0.03%
+0.6753
+0.6703 Dollar/Dollar
Dollar/Norway
9.0054
9.0285
-0.26%
+2.59%
+9.0560
+8.9714 Euro/Norway
EURNOK=
10.6750
10.6990
-0.22%
+8.52%
+10.7187
+10.6520 Dollar/Sweden
SEK=
8.7851
8.7894
+0.00%
-6.00%
+8.8138
+8.7648 Euro/Sweden
EURSEK=
10.4146
10.4150
+0.00%
-0.52%
+10.4320
+10.4035