(Updates prices, adds sterling, Swedish crown moves after data)
* New Zealand dollar down 1.5 pct on central bank outlook
* Canadian bank downgrade hurts dollar
* News outweighs impact of oil price bounce
* U.S. dollar pulls back from highs vs yen
* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
By Patrick Graham
LONDON, May 11 The New Zealand dollar sank to an
almost one-year low and its Canadian counterpart by roughly half
a percent on Thursday as domestic concerns outweighed a bounce
in oil prices for the commodity-focused currencies.
The kiwi sank by as much as 1.5 percent after the Reserve
Bank of New Zealand shocked markets by sticking with a neutral
bias on policy, warning investors they were reading the outlook
wrong and expressing approval of the currency's falls this year.
In Canada, normally a big gainer when oil prices are rising,
a downgrade of Canadian banks by ratings agency Moody's sent the
"The positive impact from Wednesday's recovery in
commodities has faded into Thursday, with central bank risk and
rating agency downgrades casting a darker shadow," said Joel
Kruger, a strategist with currencies exchange LMAX.
"In New Zealand, the RBNZ struck a surprisingly dovish chord
in its latest policy decision, while in Canada, Moody's has come
out with a downgrade of Canada's big six."
By 1035 GMT, the kiwi was 1.35 percent lower on the day at
$0.6848, having hit an 11-month low of $0.6818 earlier.
The Canadian equivalent traded 0.3 percent weaker at $1.3695.
The yen, U.S. dollar and euro were all holding in tight
ranges, the dollar edging lower after hitting an eight-week high
against the yen in Asian trade.
One riser in the European morning was the Swedish crown
, up on higher than expected inflation numbers and
backed more generally by a number of major banks and currency
managers as a good bet to gain if the euro zone's economic
outlook continues to improve this year.
Sterling, a gainer in the past month following Prime
Minister Theresa May's announcement of a snap election for June
8, slipped ahead of a closely watched "Super Thursday" of
publications by the Bank of England.
The pound has struggled to climb past $1.30 this week and
another weaker than expected batch of data, this time on
industrial output and trade, knocked around 0.2 percent off
sterling in morning trade in London.
"I actually suspect sterling is looking a bit vulnerable
here," Ilya Spivak, a currency strategist with IG Group in
"The priced-in policy outlook has firmed up a bit in recent
weeks. The data outcomes have stabilized somewhat ... but the
BOE is no more optimistic. They have said time and again that
they are reluctant to take the data at face value because of
For Reuters Live Markets blog on European and UK stock
markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets
(Editing by John Stonestreet and Raissa Kasolowsky)