FOREX-Euro dips to 2-week low, Turkish lira weakest on record

* Euro still under pressure from German court ruling
* Turkish lira slumps to record low vs dollar
* BoE leaves rates steady, holds off on stimulus
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

(Updates price action, adds comment, chart)
By Dhara Ranasinghe
LONDON, May 7 (Reuters) - The euro dipped to its lowest
level in almost two weeks on Thursday, on nagging concern over
the direction of the European Central Bank's stimulus scheme
following a German court ruling earlier this week.
Turkey's lira fell to a record low of 7.25 per U.S. dollar
TRY= , after traders interpreted comments from a Federal
Reserve policymaker as ruling out a Fed swap line to cushion
Ankara's depleted reserves. Sterling rallied after the Bank of England left interest
rates steady and held off on more stimulus. The safe-haven yen
edged away from near seven-week highs against the dollar.
The euro dipped to $1.07785 EUR=EBS , its lowest level in
almost two weeks and reversing modest gains earlier in the day.
It has shed more than 1.5% this week and is set for its biggest
weekly drop in just over a month.
It has been hurt by Tuesday's ruling from Germany's highest
court that gave the ECB three months to justify purchases under
its bond-buying programme or lose the Bundesbank's participation
in one of its main stimulus schemes. "The court ruling has opened up a lot more uncertainty over
the continuation of the ECB's asset purchase programme, which
has been a key pillar of support for the economy and financial
markets," said Lee Hardman, a currency strategist at MUFG.
"Given a lack of action from governments, the ECB has been
the main game in town."
Partly on the back of the German ruling, Deutsche Bank
analysts have cut their euro view from bullish to neutral and
revised their mid-year forecast to $1.08, down from $1.13
previously.
Relief that the Bank of England held off on further stimulus
at its meeting on Thursday boosted sterling, although the
British currency trimmed its gains as the session wore on.
It was last up just 0.1% at $1.2359 GBP=D3 , off a session
high of $1.2418. "By sending a strong signal that it plans to ease monetary
policy further soon while staying put for now the BoE has
managed to stay on top of the risks without actually doing
anything extra," said Kallum Pickering, senior economist at
Berenberg.
In contrast, Norway's central bank cut its key interest rate
to a record-low of zero from 0.25%, in a surprise move to
cushion an economy reeling from the COVID-19 pandemic.
The Norwegian crown briefly weakened against the euro
EURNOK=D3 and the dollar NOK= before recovering ground.
Stronger-than-expected Chinese export numbers lifted hopes
in global markets that China can rebound quickly and help global
growth recover from a coronavirus-induced shock.
That helped reduce demand for the safe-haven yen. The U.S.
dollar was last up 0.45% at 106.57 yen JPY=EBS , having fallen
on Wednesday to 105.985, its weakest since mid-March.
Chinese exports rose 3.5% despite expectations of 15.7%
drop, helping to lift the Chinese yuan CNY=CFXS and the
Australian dollar.
The Aussie dollar was last up 0.9% at $0.6464 AUD=D4 .