(Repeats to additional subscribers)
* Dollar slides to 1-yr low, 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
one-year 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. Commodity-heavy Australian stocks
outperformed most other markets in the region, nudging Asian
shares to a 13-month peak.
"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.
Stock market activity, however, was limited in Asia, with
markets in Japan closed for a third straight day before
reopening on Thursday.
European shares were set for a sluggish start, with futures
on the Dow Jones Euro Stoxx 50 <STXEc1> up just 0.1 percent.
Many investors are 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 and reached a 13-month high,
while the Thomson Reuters index of regional stocks
<.TRXFLDAXPU> edged up 0.2 percent.
Australia's S&P/ASX 200 <> was up 1.4 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 <.MIAPJCD00PUS>, which have
played a big role in the MSCI'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 0.5 percent at 90.70 yen <JPY=> after
tumbling in early trade. Some traders worried that speculators
may try to push the U.S. currency below the 90 level and
trigger more automatic sell orders expected at around that
mark.
"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 dollar index, a gauge of its performance against six
major currencies, fell to a one-year low of 75.892 <.DXY> in
volatile early trade -- a low that was later recalculated due
to the sharp moves in the gap between New York and Asia trade.
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 $0.7268 <NZD=D4> and hit a
13-month high of $0.7315 on the Reuters Matching platform after
the growth figures.
New Zealand short-term interest rates were hit hard by the
building expectations of a coming rate rise. One-year swap
rates <NZDIRS> rose 7 basis points to 3.23 percent, while the
three-year jumped 12 basis points to 4.87 percent.
While the curve steepened on the day, 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 164 basis points, near a
record peak of 170 basis points reached in August.
(Additional reporting by Denny Thomas in Sydney and Rika
Otsuka in Tokyo; Editing by Jeremy Laurence)
