* Major currencies hold to tight ranges
* Investors await Fed meeting, U.S. inflation and jobs data
* Japan closed all week, China closed Wednesday-Friday
* Graphic: World FX rates in 2019 tmsnrt.rs/2egbfVh
By Tom Finn and Saikat Chatterjee
LONDON, April 29 (Reuters) - A rally in the dollar faltered on Monday with strong U.S. data doing little to lift the currency or convince investors that a slowdown in activity is over.
The greenback traded in a narrow range as Japan kicked off a week of holidays. The break gives traders pause before a Federal Reserve policy meeting and a raft of global data including on U.S. core inflation and payrolls.
All eyes are on the Fed to see what its policymakers made of a first-quarter gross domestic product report that showed strong growth of 3.2 percent, but largely for one-off reasons including a surge in inventories.
“If the market’s reaction to Friday’s U.S. GDP data is any guide, investors still seem more concerned over a slowdown in activity and slowing inflation,” said Chris Turner, head of currency strategy at ING in London.
“Unless European and Chinese growth figures deliver some impressive recoveries this week, expect the dollar to benefit by default,” he added.
Against a basket of currencies, the dollar was a fraction softer at 97.970, having eased from a near two-year peak of 98.330.
The dollar fell back on Friday despite the upbeat GDP report because core inflation slowed sharply, leading speculators to narrow the odds on a rate cut this year.
The aggregate dollar long position climbed to $33.6 billion on Monday, its highest level since December 2015, according to Scotiabank’s weekly CFTC sentiment report. The euro remains the largest held net short.
Most other major central banks have also turned dovish in recent months, keeping their currencies subdued.
The Canadian dollar and Swedish crown, for instance, both took hits last week when their central banks put a halt on future rate hikes.
The European Central Bank is under pressure to keep its stimulus in place, if not to do a new round, while markets are pricing in rate cuts for Australia and New Zealand following weak inflation readings.
Some fear the lack of liquidity could lead to a re-run of the dollar’s flash crash from January when the yen made massive gains in a matter of minutes as bears were forced to cover short positions.
The euro was a shade firmer at $1.1157, but still not far from a near two-year trough of $1.1110. The euro has been broadly pushing lower since early January.
A swathe of manufacturing surveys from Europe and China are due later this week, along with a first reading on EU GDP. The U.S. payrolls report on Friday is forecast to show a solid increase of 180,000 in April, with unemployment at 3.8 percent.
Additional reporting by Wayne Cole in Sydney Editing by Peter Graff