(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 (Reuters) - 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 dollar lower.
"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 London.
"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 Brexit-related worries."
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)