* Nokkie up 0.8% vs dlr after better economic projections
* Dollar index poised for second week of gains on equity
* Sterling stabilises after sinking nearly 2% the day before
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By Olga Cotaga
LONDON, Sept 11 (Reuters) - The euro rose slightly on Friday
as traders noted European Central Bank policymakers' calm
approach to the euro's recent appreciation, while the Norwegian
crown surged on official forecasts the economy will now contract
by less than predicted.
After a press conference on Thursday at which ECB President
Christine Lagarde said the bank did not target the exchange
rate, sources said policymakers had agreed to look through the
euro's rise, judging it was broadly in line with economic
Any advance higher in the euro may be curtailed, however, by
ECB chief economist Philip Lane's warning on Friday that a
strong euro will further dampen price pressures.
"When market participants compare the tone of the ECB
with the Fed’s formal shift to allow greater inflation, the
market remains encouraged to sell the dollar," said Derek
Halpenny, head of research at MUFG.
"But the euro/dollar correction back from 1.1900 after the
ECB press conference does indicate that dollar selling may still
have reached its limits for now," Halpenny said.
In fact, the U.S. currency was poised for a second week of
gains, an index which tracks it against major currencies showed
. The dollar gained overnight as jitters in U.S. equity
markets had investors sticking to safer assets.
The euro was last trading up 0.2% at $1.1841,
though it had reached $1.1917 the day before, an eight-day high.
The dollar index was stable at 93.22, while dollar/Japanese
yen also was stuck at 106.19.
The Norwegian crown rose 0.8% to 9.0215 against the U.S.
dollar after the Norwegian statistics bureau now
expects the economy to contract by 3.2% this year, less than the
3.9% drop predicted in June.
That prompted Norway to end its temporary relaxation of
mortgage lending regulations at the end of September.
Against the euro, the crown rose by 0.4% to 10.6795
, though these moves were not enough to offset the
falls on the back of oil price declines in the previous
Markets were looking to U.S. consumer price data due at 1230
GMT for an insight into the recovery and to the challenge facing
the Federal Reserve as it looks to lift inflation. Economists
polled by Reuters expected inflation to fall to 0.3%
month-on-month in August from 0.6% the month before.
SEB analysts said there is less focus on inflation because
of the Federal Reserve's new, more relaxed stance on its 2%
Elsewhere, the pound advanced 0.3% to 1.2840, but
stayed flat versus the euro at 92.23 pence after one
of the heaviest selloffs seen this year sent the pound falling
nearly 2% against the euro on Thursday.
Sterling was on course for its worst week since March, when
forex markets were going through a coronavirus-induced turmoil.
The Brexit saga intensifies and the British currency may be
poised for further losses as time is ticking for the UK to forge
a trade deal with the European Union by the end of the year.
(Reporting by Olga Cotaga; Editing by Toby Chopra)