* Dollar hits two-week lows against a currency basket
* Markets appear to be positioning for no major Fed taper
* Asian emerging market currencies eye central bank meetings
By Ian Chua
SYDNEY, Sept 12 (Reuters) - The dollar struggled at two-week lows against a basket of major currencies early in Asia on Thursday, as markets continued to chip away at its recent gains on growing doubts the Federal Reserve will scale back stimulus in any significant way next week.
The dollar index stood at 81.518, having fallen as far as 81.445 overnight. It has broken below its 200-day moving average and lost more than 1 percent from a seven-week peak set on Sept. 5.
The move came as U.S. Treasury yields dipped, with the benchmark 10-year slipping to 2.912 percent, pulling back from a two-year high of 3.007 percent reached last Friday.
Indeed, since Friday’s disappointing U.S. nonfarm payrolls data, markets appeared to have tempered their expectations for any aggressive moves by the Federal Reserve.
“Right now, it looks to us that investors expect about $10 billion tapering in September, combined with extremely dovish language, but no change in the timetable for ending QE,” said Steven Englander, Citi’s global head of G10 FX Strategy.
A Reuters survey of 69 economists on Monday also showed the majority expected the Fed to trim its $85 billion monthly bond-buying programme by a modest $10 billion.
This has also helped many emerging market currencies recover from a recent selloff. However, the threat of renewed capital outflows continues to linger, a point that central banks in Indonesia, the Philippines and South Korea will have to contend with as they hold their policy reviews.
Citi economists expect $10-15 billion of Fed tapering and no change to the withdrawal timetable, an outcome that Englander said would be neutral, or even slightly hawkish, relative to current market expectations.
The weakened dollar saw the euro push up to $1.3325, a high not seen since Aug. 29. The common currency, last at $1.3309, has completely recovered from a selloff last week sparked by dovish comments from the European Central Bank.
Against the yen, the dollar only lost a bit of ground and was still higher on the week. Improved risk appetite and a rallying Nikkei, helped partly by diminishing worries about U.S. military strikes on Syria, had weighed on the Japanese currency.
The dollar bought 99.92 yen, having retreated from a high of 100.62. Still, it was up 0.8 percent on the week.
The euro’s rally against the yen has also cooled off. It slipped to 132.94 yen from a 16-week high around 133.37.
Commodity currencies have fared well with the New Zealand dollar enjoying a further boost after the Reserve Bank of New Zealand said interest rates will probably need to rise next year.
The kiwi jumped to a near four-week high of $0.8137, bringing this week’s gains to 1.6 percent. The Australian dollar was also sitting pretty at an 11-week high near $0.9324 , having risen 1.5 percent so far this week.
Further gains for the Aussie will depend on Australia’s jobs data due at 0130 GMT. Forecasts centred on a rise of 10,000 jobs and the unemployment rate to edge up to 5.8 percent.