(New throughout, changes dateline from previous TOKYO/SYDNEY)
* Euro a touch higher having ridden out lower inflation numbers
* Smooth Fed meeting calms worries over weak U.S. GDP
* Sterling rises to near 5-year high
LONDON, May 1 (Reuters) - The euro inched higher on Thursday having ridden out two days of worse than expected news on euro zone inflation and the U.S. economy that have not fundamentally altered perceptions of the policy outlook in either.
In a day thinned out by public holidays in Asia and Europe, sterling also traded strongly, rising to an almost 5-year high of $1.6921 after a survey of manufacturing sector purchasing managers came in stronger than expected.
The euro's continued strength in the face of a steady reining in of U.S. monetary policy stimulus and expectations the European Central Bank would be forced at some stage to do the opposite has become one of this year's dominant trends.
A number of analysts had predicted low euro zone inflation on Wednesday, following lower than forecast figures out of Germany a day earlier, might be enough to turn the single currency significantly weaker.
But instead it bounced back robustly and was up another 0.2 percent on Thursday at $1.3888.
"I thought yesterday we might have the ingredients for some more decisive weakness but it just did not materialise," said Daragh Maher, strategist with HSBC in London.
"One of the problems is that there is a pretty high level of cynicism about the ECB's willingness to act. On the top side on the other hand there is a reluctance to push higher because that may actually force them to do so."
Policymakers at the euro zone's central bank have talked aggressively about their willingness to take action to head off a debilitating cycle of falling prices and demand, and as such have outright opposed any further gains for the euro.
But they face substantial barriers to delivering the sort of decisive policy action that would weaken the currency at a time when capital is flooding back into the euro zone's peripheral economies and stock markets.
U.S. jobs data on Friday may be an important factor in deciding near-term direction.
"Technically, the US dollar looks vulnerable again," said John Hardy, head of FX strategy at Saxobank. "If we get a batch of indifferent, rather than decidedly strong data from the US through Monday, the EURUSD may test 1.4000."
Sterling has gained around 10 percent against a trade-weighted basket of currencies in the past 12 months but has struggled to make more progress since mid-February as many players judged the best news on the economy had been priced in.
There are growing doubts over whether inflation, investment and underlying demand in the economy will be strong enough to force the Bank of England to raise interest rates early next year, as market pricing suggests.
The manufacturing PMI survey on Thursday made for more encouraging reading, rising to 57.3 points compared to the forecast 55.4.
"The pound has taken out $1.6900 and technically the next significant multi-year resistance level is the August 2009 high of 1.7043," analysts from BNP Paribas said in a note after the data.
Like many, however, they continued to favour sterling against other major currencies than the dollar.
"With the dollar prone to rebound as US data improves, our preference remains for the euro to move lower against sterling," they said.
The dollar was propped up overnight by a steady-as-she-goes message from the Federal Reserve on its gradual reduction in the amount of dollars it is pumping into the economy every month. The bank as expected cut another $10 billion off the programme and provided a reasonably upbeat message on the economy that eased market nerves over slightly lower than expected first quarter growth figures.
A speech by Fed chair Janet Yellen may give markets more to go on later. Against a basket of currencies the dollar traded just 0.01 percent lower.
"The GDP numbers were soft but the Fed had a look and said its outlook was unchanged," Maher said. "You can have weaker numbers but unless it affects the outlook for policy you won't see much reaction." (Editing by Toby Chopra)