* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
* Dollar index hits highest since May 2017
* Dollar awaits U.S. GDP to cap off bullish week (Adds details and quotes, updates prices)
TOKYO, April 26 (Reuters) - The dollar held steady close toa two-year high against its peers on Friday, supported by datashowing strong U.S. capital goods orders, while a first-quarterGDP report to be released later in the global day could furtherreinforce bullishness.
The dollar index versus a basket of six major currencies .DXY stood at 98.123 after advancing to 98.322 on Thursday,its highest since May 2017.
Data on Thursday showed new orders for U.S.-made capitalgoods increased by the most in eight months in March. Thatfollows other recent U.S. data that show strength in retailsales and exports which have eased fears of a sharp slowdown in the world's biggest economy. urn:newsml:reuters.com:*:nL1N2260N5
According to a Reuters survey of economists, data to bereleased at 1230 GMT on Friday will probably show GDP increased2.0 percent year-on-year in the first quarter, slightly slowerthat the 2.2 percent posted in the previous quarter.
"We expect the GDP data to underline steady economicrecovery," said Shin Kadota, senior strategist at Barclays inTokyo.
"Differences in economic fundamentals is a key driver forcurrencies now that the Fed - and more recently the Swedish andJapanese central banks - have adopted a dovish stance," Kadotaadded.
Sweden's central bank said on Thursday that recent weakinflationary pressures meant an interest rate hike would comeslightly later than it had planned, sending the Swedish crown SEK=D3 to a 17-year low. urn:newsml:reuters.com:*:nL5N2272LR
In a move to dispel any doubt over its commitment toultra-loose policies, the Bank of Japan on Thursday put a timeframe on its forward guidance for the first time by tellinginvestors that it would keep interest rates at super-low levelsfor at least one more year. urn:newsml:reuters.com:*:nL3N2270H5
The dollar was nearly flat at 111.64 yenJPY= aftershedding 0.5 percent overnight.
The greenback has poked above 112.00 yen several times thismonth without building a strong enough foothold above thethreshold, which has become a key technical resistance level.
While the dollar has been caught in narrow range against theyen through most of April, Mitsuo Imaizumi, chief FX strategistat Daiwa Securities, sees the next significant move would seethe dollar strengthen.
"The Chinese PMI and the U.S. non-farm jobs report are dueover the next week and both are expected to be quite good. Thereis also the next round of U.S.-China trade talks, which couldfurther lift risk sentiment," Imaizumi said.
"The market could thus see a significant increase in 'riskon' during the Japanese holidays, pushing dollar/yen towards113.00 yen."
U.S. Trade Representative Robert Lighthizer and TreasurySecretary Steven Mnuchin will travel to Beijing for trade talksbeginning on April 30. urn:newsml:reuters.com:*:nL1N2250ZD
Larry Kudlow, director of the White House National EconomicCouncil, said this week that the talks were making progress andthat he was "cautiously optimistic" about the prospects forstriking a deal.
Starting on Saturday, Japan embarks on a 10-day publicholiday to mark the abdication of the emperor, who will bereplaced by his son.
The euro was a touch higher at $1.1138EUR= but withinreach of $1.1117, its lowest level since June 2017 plumbed onThursday.
The single currency has shed nearly 1 percent against thedollar this week, weighed by worries about the health of theeuro zone economy.
The Australian dollar nudged up 0.15 percent to $0.7027AUD=D4 after ending Thursday little changed.
The Aussie has lost nearly 2 percent this week, during whichit sank to a near four-month trough as soft domestic inflationdata boosted the prospect of a rate cut by the Reserve Bank ofAustralia. (Reporting by Shinichi Saoshiro; Editing by SimonCameron-Moore) ((firstname.lastname@example.org; Reuters Messaging:email@example.com+813-6441-1774))