FOREX-US dollar rallies; Aussie hits five-year low after China tariff concerns

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      Powell pushes back on easing due to tariff-induced inflation


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      Australian dollar hits five-year low against dollar


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      US dollar hits a six-month low versus safe-haven Swiss Franc


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      Investors weigh dollar's status as a safe haven currency



 (Updates prices throughout, Powell's comment, analyst comments)
    By Laura Matthews and Stefano Rebaudo
       April 4 (Reuters) - The U.S. dollar rose against major
currencies such as the euro and yen on Friday after Federal Reserve
Chairman Jerome Powell acknowledged the repercussions of
larger-than-expected U.S. tariffs and signaled a cautious tone on
future easing.
        Powell said tariffs increased the risk of higher inflation and
slower growth, highlighting the difficult path ahead for policymakers
at the U.S. central bank.
        The Australian dollar, meanwhile, seen as a liquid proxy for
the yuan, hit five-year lows against the greenback after China
announced additional tariffs on U.S. goods on Friday.
        "As investors await clarity on potential retaliatory measures
and the Fed's response should inflation and growth concerns intensify,
market pricing reflects expectations of four rate cuts this year,
contrasting with the Fed's stance of patience," said Uto Shinohara,
senior investment strategist at Mesirow Currency Management.
        "The Fed has indicated it is too soon to make confident
predictions and prefers to wait for uncertainty to subside. The dollar
remained relatively stable during Powell's speech, reflective of the
wait-and-see messaging throughout."
        Powell's comments followed data earlier in the day showing
that non-farm payrolls rose by 228,000 jobs last month after a
downwardly revised 117,000 rise in February, well above the 135,000
forecast. The unemployment rate ticked up to 4.2% from 4.1%.
        Still, markets drew little comfort from the numbers because
"they don't factor in any of this week's events or the fallout that
will inevitably come with them over the next few weeks," said Helen
Given, director of trading, Monex USA.
        As a preview of what might lie ahead for investors, China
announced additional tariffs of 34% on all U.S. goods, starting April
10, the most serious response in a trade war with President Donald
Trump. The move added to recession concerns and intensified a global
stock market rout.
    Having fallen below Thursday's close, the euro was last
down 0.69% at $1.10976, after jumping 1.8% - its biggest daily rise
since November 2022 - as high as $1.1147 on Thursday, a level not seen
since September 30.
    Markets are predicting four quarter-point interest rate cuts from
the Federal Reserve in the remainder of this year, and reduced the
odds of further Bank of Japan tightening to 11 bps.
    They also fully priced in three 25 basis point European Central
Bank rate cuts by December.
        The dollar index, a measure of the currency against a
basket of six major peers, had plunged 1.9% on Thursday, its worst day
since November 2022. It rose 0.71% to 102.72 in afternoon trading on
Friday.
    The Swiss Franc jumped 1.20% versus the euro and hit a
6-month high versus the dollar.
    Meanwhile, sterling 53
 Euro/Doll  96
 Dollar/Ye  58
 Euro/Yen   04
 Dollar/Sw  78
 Sterling/  889?
 Dollar/Ca  54
 Aussie/Do  005
 Euro/Swis  64
 Euro/Ster  32
 NZ         64
 llar
 Dollar/No  066
 Euro/Norw  03
 Dollar/Sw  51
 Euro/Swed  94

 (Reporting by Laura Matthews and Stefano Rebaudo; Editing by Shri
Navaratnam, Clarence Fernandez, Toby Chopra and Nia Williams)