* Euro eases below $1.1400 as German yields dip
* ECB's Draghi reaffirms commitment to QE
* Upcoming data awaited for clues on U.S. outlook
By Anirban Nag
LONDON, May 15 (Reuters) - The euro fell below $1.14 on Friday as a recent spike in German Bund yields stalled, but the single currency was still on track for its fifth straight week of gains.
Traders said speculators have been trimming short positions in the euro this week and the trend was likely to offer the currency support at lower levels. On the other hand, the dollar index held steady near four-month lows as worries about the pace of recovery in the United States cast doubts over when the Federal Reserve would start raising interest rates.
The euro fell 0.2 percent to $1.1385 in London trade, off a three-month high of $1.1445, but still 9 percent higher than its 12-year low of $1.0457 struck on March 16. That low was hit around the time the European Central Bank embarked on its one-trillion euro bond-buying programme and to which President Mario Draghi reiterated his commitment.
"Draghi reaffirmed his commitment to QE yesterday and we think the corrective course for the euro has run its course," said Manuel Oliveri FX strategist at Credit Agricole. "There isn't much of an upside left."
Part of the reason for the euro's rebound has been a steady stream of improved euro zone data and a rise in inflation expectations. In contrast, growth in the first quarter in the United States has disappointed dollar bulls. Retail sales in April came in softer and left investors wondering if the Fed would lift rates later this year.
More importantly, the recent global bond market rout saw the euro draw support from a narrowing yield gap between Bunds and U.S. Treasuries. With German yields rising at a faster pace, the gap between 10-year Bunds and Treasuries has shrunk to 154 basis points, from around 180 basis points about a month ago, making the euro more attractive to investors.
German Bund yields have stopped climbing -- they were lower on Friday -- but the gap still remained around 154 basis points on Friday.
Traders said upcoming U.S. data will be the main driver to the dollar. U.S. data due later on Friday include industrial production for April and the University of Michigan's preliminary May reading on consumer sentiment.
"Worries about the U.S. economic outlook have been a major factor behind the dollar's recent pullback," said Tohru Sasaki, head of Japan rates and FX research at JPMorgan Chase Bank in Tokyo. "Upcoming U.S. economic data is next big thing to watch out for," he said. "It could push the dollar even lower." (additional reporting by Tomo Uetake; Editing by Dominic Evans)