* Dollars slips off two-week high
* dollar falls overnight
* Sterling steady before BoE meeting
* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
LONDON, May 6 (Reuters) – The dollar fell from a two-week high on Thursday, while traders focused on economic data that may provide clues on when the Federal Reserve will dial back monetary stimulus and a Bank of England meeting.
The dollar has rebounded from a one-month low over the past week, swung by U.S. economic data that has largely supported the case for a rapid recovery from the pandemic. currency markets were generally calm as European markets opened. The Australian dollar fell sharply overnight when China said it would stop its economic dialogue with Australia, but the currency had recovered to trade close to flat on the day as European markets opened AUD=D3 . 0711 GMT, the Australian dollar was up 0.1% versus the U.S. dollar at 0.77530, having hit as low as 0.7701 overnight AUD=D3 .
The New Zealand dollar also dropped, but saw a similar recovery NZD=D3 .
“The announcements of the formal suspension of the economic dialogue between China and Australia should not have a lasting impact on markets given the already strained relationship between the two ahead of the event,” wrote ING strategists in a note to clients.
The was a touch lower, down 0.1% on the day at 91.152 =USD . It hit as low as 90.422 one week ago and has since strengthened, helped by end of month flows and comments by U.S. Treasury Secretary Janet Yellen’s comments saying interest rates may need to rise to prevent the American economy from overheating. Wednesday, Federal Reserve speakers downplayed the risks of higher inflation. united dovish message should continue to help dampen upward pressure on US yields and the US dollar ahead of what is expected to be another blockbuster employment report on Friday with non-farm payrolls expected to rebound by close to one millions jobs as the economy to reopens,” wrote MUFG currency strategist Lee Hardman in a note to clients.
Sterling was steady against the dollar at $1.3909 GBP=D3 and down 0.2% against the euro at 86.425 pence per euro EURGBP=D3 ahead of the Bank of England meeting at 1100 GMT.
The Bank of England will say that Britain’s economy is heading for a much stronger recovery this year than it previously expected and it might start to slow its pandemic emergency support. central bankers have every reason to sound optimistic,” wrote Thu Lan Nguyen, FX and EM analyst at Commerzbank (DE:).
“What is relevant for Sterling in this context is whether the central bank is already sufficiently confident about economic prospects to give the first indication of a reduction of its expansionary degree.”
Investors were also paying attention to elections in Scotland which could herald a volatile political showdown over new independence referendum. euro was up 0.2% against the dollar at $1.20230 .
Strong domestic demand for consumer goods propelled a bigger than expected jump in German industrial orders in March, suggesting that manufacturers in Europe’s largest economy will support a recovery in the second quarter. Canadian dollar was near three-year highs, helped by oil price gains and the Bank of Canada’s recent shift to more hawkish guidance CAD=D3 . Norwegian crown was slightly stronger, up 0.2% against the euro, with the pair changing hands at 10.0125 EURNOK=D3 . The Norges Bank’s rate announcement at 0800 GMT is not expected to see rates change.
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was down around 1.1% at $56,818, still below the all-time high of $64,895.22 it reached in April .
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