Dollar climbs, sterling stabilizes as focus turns to Fed speakers

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Gains in U.S. and European stocks helped the dollar and sterling climb against safe-haven currencies like the yen on Thursday as traders looked to Federal Reserve speakers later in the day for fresh direction on the U.S. rates outlook.

As doubt continued to grow about whether the Fed can raise rates in March, or indeed at all this year, the dollar struggled to make significant headway with the euro down 0.19 percent at $1.1034.

With the Federal Reserve's Dennis Lockhart and John Williams due to speak and as investors look to the G20 meeting of finance ministers and central bankers starting on Friday, pressure is on leaders to get the global economy back on track and calm markets after one of the rockiest starts to a year on record.

"We're stuck in a range, waiting for direction and some are looking to the G20 meeting this weekend for some sort of sign," said Lee Ferridge, head of macro strategy for North America at State Street in Boston.

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U.S. stocks were slightly higher on the day after data showed an uptick in U.S. manufacturing and a 6 percent fall in Shanghai's stock market did not spill over to Europe, where shares rebounded.

The yen, which rallied in recent days driven by low risk-appetite, weakened overnight. "But I wouldn't sound the all-clear just yet. We see a persistent weakness in Chinese equity markets, and oil markets are still a risk," said Thu Lan Nguyen, a strategist with Commerzbank in Frankfurt.

The dollar was last up 0.67 percent at 112.84 against the and the dollar index was flat.

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Oil was down, but both Brent and U.S. crude were holding well above $30 a barrel and have looked somewhat steadier over the past week.

Sterling and the euro have underperformed this week, on fears a British exit from the EU could mean more uncertainty for Europe.

Despite the pound being up 0.35 percent at $1.3975, it remained around 3 percent lower this week against the dollar, with a test of its 2009 low of $1.35 within sight.