* Dollar dips vs yen but dollar outlook still rosy
* U.S. data reinforces rate hike
* Kiwi down 1.5 pct on NZ central bank outlook (Updates prices, adds comment)
By Gertrude Chavez-Dreyfuss
NEW YORK, May 11 (Reuters) - The dollar fell for the first time in five days against the yen on Thursday, as investors consolidated recent gains, with concerns related to the fallout of U.S. President Donald Trump’s unexpected dismissal of Federal Bureau of Investigation chief James Comey also undermining the currency.
“We do need impetus from new drivers because the day-to-day stuff we track shows dollar/yen has been overbought,” said Mark McCormick, North American head of FX strategy, at TD Securities in Toronto, adding that the dollar’s move could be due to position-squaring.
Still, the outlook for the greenback is bright, especially after upbeat U.S. data on Thursday solidified expectations of an interest-rate hike by the Federal Reserve next month.
Data showed U.S. initial jobless claims unexpectedly fell last week, while producer prices rebounded strongly in April.
“Although March showed a series of lackluster economic data points out of the U.S., April has appeared to show a rebound,” said James Chen, head of research at Forex.com in Bedminster, New Jersey, adding that recent reports support a potential Fed hike in June.
According to Macroeconomic Advisers, the U.S. economy is tracking gross domestic product growth of 3.9 percent in the second quarter following Thursday’s data, while rate futures priced in an 85 percent chance the Fed will tighten policy again next month, according to the CME’s FedWatch.
The firing of Comey still weighs on the currency market, however, which could curb the dollar’s upside against the yen, analysts said.
Days before his sacking, Comey told lawmakers he had sought more resources for his agency’s probe into possible collusion between the presidential campaign of Donald Trump and Russia to sway the 2016 U.S. election.
Sterling, meanwhile, hit a one-week low against the dollar after the Bank of England’s inflation report showed rates are unlikely to rise within the next two years. It was last down 0.5 percent at $1.2880.
The BoE’s Monetary Policy Committee also voted 7-1 in favor of keeping interest rates on hold this month.
In late trading, the dollar fell 0.4 percent against the safe-haven yen to 113.87 yen. Against the Swiss franc, another safe haven, the dollar fell 0.2 percent to 1.0073 francs .
The dollar index was down 0.1 percent at 99.625.
The New Zealand dollar also fell, sliding to an almost one-year low after the Reserve Bank of New Zealand stuck to a neutral bias on policy, warning investors they were reading the outlook wrong and expressing approval of the currency’s declines this year.
Additional reporting by Patrick Graham in London; Editing by Bernadette Baum and Lisa Shumaker