May 14 (Reuters) - The dollar index reversed an earlier loss on Wednesday as Treasury yields firmed following comments by Fed officials and as Republicans advance elements of President Donald Trump's budget package. Chicago Fed President Austan Goolsbee said the Fed still needs more data to discern the direction of prices and the economy. Fed Vice Chair Philip Jefferson said recent inflation data point to progress though the outlook is uncertain due to the possibility new import taxes will drive prices higher.
U.S. data on Thursday includes producer prices, retail sales and weekly jobless claims. Qatar signed an agreement to purchase jets from U.S. manufacturer Boeing worth $200 billion during President Donald Trump's visit. European Central Bank supervisors are asking some of the region's lenders to assess their need for U.S. dollars in times of stress, as they game out scenarios in which they cannot rely on tapping the Federal Reserve under the Trump administration.
U.S. envoy Steve Witkoff and Secretary of State Marco Rubio will travel to Istanbul on Friday for Russia-Ukraine talks. Separately, Bloomberg reports sources as saying that the U.S. is not negotiating for a weaker dollar as part of tariff talks. EUR/USD was flat, reversing an earlier gain as higher Treasury yields and lower gold weighed. European Central Bank policymaker Joachim Nagel underlined the role of the U.S. dollar as a reserve currency for the global system, though sees the euro becoming stronger in that same role over the next few years. A daily gravestone doji may be a concern for EUR/USD bulls with further losses testing the 55-DMA at 1.1043. Risk reversals, however, favor calls with the one-year the most euro bullish in five years. EUR/CHF gained for a fifth day and was on pace to close above its 200-day moving average at 0.9405.
GBP/USD slipped back below its 21-day moving average ahead of Thursday's U.K. GDP report for March.
Bank of England interest rate-setter Catherine Mann said she voted to keep borrowing costs on hold last week because Britain's labor market had been more resilient than she expected. Cable continues to orbit the 1.33 level with gains likely capped by its 2025 high set on April 28 at 1.3445.
USD/JPY trimmed losses as Treasury yields firmed. The pair was also helped by the Bloomberg report that the U.S may not be seeking a lower dollar in trade talks. An Ichimoku cloud at 147.60 may limit USD/JPY gains whereas a double-bottom near 145.60 lends support.
AUD/USD slipped below its 200-day moving average amid weakness in metal prices.
Treasury yields were up 3 to 4 basis points. The 2s-10s curve was up about 1 basis points to +46.5bp.
The S&P 500 was little changed in mixed trading.
Oil prices fell 1.1% after a weekly build in US crude stocks.
Gold fell 2.4% to a one-month low on trade optimism while copper slipped 1.8%.
Heading toward the close: EUR/USD -0.12%, USD/JPY -0.46%, GBP/USD -0.35%, AUD/USD -0.71%, DXY +0.08%, EUR/JPY -0.58%, GBP/JPY -0.85%, AUD/JPY -1.18%.(Editing by Burton Frierson Reporting by Robert Fullem)
