* Dollar slides, seen vulnerable to further drop
* NZ dlr and swap rates jump on upbeat GDP, eye central
bank
* Commodity-linked shares push up Asia stocks 0.4 pct
* Fed awaited, expected to acknowledge recovery
By Eric Burroughs
HONG KONG, Sept 23 (Reuters) - The dollar slid to a
13-month low against a basket of currencies as market players
seized on surprisingly strong New Zealand economic growth data
as a reason to push the kiwi dollar higher and dump the U.S.
currency.
Even as many commodity prices dipped, the dollar's drop has
boosted oil and metals and lifted resource-related shares
around the region. Resource-heavy Australian stocks <>
outperformed other markets in the region.
"It's a mixture of optimism about global growth and
stronger commodity prices, which is particularly good for
Australia," said Tom Elliott, a fund manager with MM&E Capital,
which oversees about A$50 million in Australian shares.
Activity was limited, with markets in Japan closed for a
third straight day before reopening on Thursday.
Many investors were also waiting for the Federal Reserve's
policy decision later in the day, looking for changes in its
post-meeting statement that would acknowledge the economy's
improvement and might suggest more steps towards winding down
its emergency measures to support financial markets.
[]
The Fed has already been meeting with primary bond dealers
on Wall Street to discuss different methods for absorbing the
massive reserves injected into the banking system to stave off
the worst financial crisis since the Great Depression.
[]
The MSCI benchmark of Asia-Pacific shares outside Japan
<.MIAPJ0000PUS> was up 0.4 percent, while the Thomson Reuters
index of regional stocks <.TRXFLDAXPU> edged up 0.1 percent.
Australia's S&P/ASX 200 <> was up 1.3 percent on the
back of a rise in commodity-linked shares. BHP Billiton
<BHP.AX>, the world's biggest miner, rose 1 percent.
Consumer discretionary shares, which have played a big role
in the market's nearly 60 percent surge in this year, were the
biggest sector to rise on the day.
NEW ZEALAND RECESSION ENDS
The New Zealand dollar's jump in early trade triggered a
wave of U.S. dollar selling after key levels were breached,
prompting more hedge funds and players to build up bets that
the U.S. currency is poised for a retreat towards last year's
record low.
New Zealand's economy unexpectedly grew 0.1 percent in the
second quarter, snapping the country's longest recession on
record and stoking expectations that its central bank could
start lifting interest rates from record lows early in 2010.
[]
Asia has been at the forefront of the global economy's
recovery thanks to China's big stimulus spending and an
aggressive slash in inventories during the slide in global
trade that left manufacturers better positioned for the
rebound.
The dollar was down 0.4 percent at 90.80 yen <JPY=> after
tumbling in early trade, with some traders worried that
speculators may try to push the U.S. currency below the 90
level and trigger more automatic sell orders expected there.
"The dollar is vulnerable at the moment as it is around key
levels against many currencies, hovering in areas where lots of
loss-cut selling orders await," said Tohru Sasaki, chief FX
strategist for Japan at JPMorgan Chase in Tokyo.
The euro was up slightly at $1.4810 <EUR=> after jumping as
high as $1.4843 on trading platform EBS, a one-year peak.
The kiwi jumped 1 percent to $0.7260 <NZD=D4> and hit a
13-month high of $0.7315 after the growth figures.
New Zealand short-term interest rates were hit hard by the
building expectations of a coming rate rise. One- and
three-year swap rates <NZDIRS> both jumped 6 basis points to
3.22 percent and 4.87 percent respectively.
Analysts expect short-term rates to keep rising more
quickly as a New Zealand rate rise comes into view, causing the
swap curve to flatten. The one-year/three-year curve is at 165
basis points, near a record peak of 170 basis points reached in
August.
(Additional reporting by Denny Thomas in Sydney; Editing by
Tomasz Janowski)
