FOREX-Euro flat ahead of ECB meeting; dollar recovers slightly as caution returns

* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
* Central banks set theme for currencies
* Euro steady as traders eye ECB meeting
* Yuan rises to two-week high

(Updates throughout, changes dateline to LONDON)
By Elizabeth Howcroft
LONDON, April 30 (Reuters) - The euro was broadly flat on
Thursday ahead of euro zone GDP data and the European Central
Bank meeting, while the dollar started to recover in early
London trading after a risk-on mood saw it fall overnight.
An advanced reading of euro zone GDP data for the first
quarter is due at 0900 GMT. Although lockdown and social
distancing measures were introduced for only a small proportion
of the period, euro area GDP is expected to decline 3.5%
quarter-on-quarter, according to a Reuters poll. ECILT/EU
Attention will then focus on the ECB, which is printing cash
at a record rate as the coronavirus pandemic sees European
countries' debt surge. The ECB is under pressure to ramp up its response to the
virus. There are some expectations that euro zone policymakers
will expand debt purchases to include junk bonds and take other
steps to ease conditions in credit markets. Analysts are not ruling out a move later today but expect
the ECB to be more likely to act in June.
"No doubt the ECB will underline that it would implement
further measures if required," wrote Commerzbank FX and EM
analyst Antje Praefcke in a note to clients.
"But at the same time it is likely to point out that fiscal
policy in the euro zone has to make its contributions too," she
wrote.
The euro was broadly flat, at $1.088, having touched a
ten-day high EUR=EBS .
European member states have struggled to coordinate a
debt-sharing recovery fund in response to the coronavirus, which
has exposed old political divides in the European Union as
southern European economies such as Italy and Spain are the
hardest hit. RBC analyst Adam Cole wrote in a note to clients that he
expected the focus of the ECB news conference, due to start at
1230 GMT, will be the aftermath of last week's European leaders'
meeting and the issue of fragmentation in the euro zone.
The dollar fell overnight after the U.S. Federal Reserve
left the door open to more monetary easing and positive trial
results for a drug to treat COVID-19 also boosted risk appetite.
More countries are taking steps to re-open their economies
as coronavirus infections slow, giving some cause for optimism.
Against a basket of currencies =USD , the dollar touched a
two-week low before recovering somewhat, last up 0.1% on the
day. It came close to six week lows versus the yen in early
London trading, before starting to recover, last at 106.63
JPY=EBS .
The riskier Australian and New Zealand dollars, which rose
overnight as risk sentiment improved, dipped down on Thursday
morning AUD=D3 NZD=D3 .