* Dollar index edges up, still near 1-year low
* Trading cautious as Fed statement, G20 summit looms
* New Zealand dollar surges on growth surprises
* BoE minutes show no plans to increase asset buying
(Updates prices, adds detail, comment)
By Steven C. Johnson
NEW YORK, Sept 23 (Reuters) - The dollar firmed slightly
but remained near a one-year low against a basket of currencies
on Wednesday as investors braced for the end of a Federal
Reserve meeting expected to keep U.S. interest rates at record
lows.
Dealers were on alert, though, for signs that the Fed may
curtail some of the programs that over the last year have
injected trillions of dollars into the troubled banking system,
and that was keeping exchange rate moves somewhat subdued. For
details see [].
"People are watching for tweaks to their current programs,
which would be market-moving, but I don't think they want to
rattle the markets right now," said Jacob Oubina, senior
currency strategist at Forex.com in Bedminster, New Jersey.
Traders were also keeping an eye on a Group of 20 summit,
which begins on Thursday and is expected to call on countries
to maintain economic stimulus plans, a move which could give a
boost to riskier assets. [].
The dollar index <.DXY>, which measures the dollar's value
against a basket of six other major currencies, was marginally
higher at 76.219, off an earlier low of 75.892, a level not
seen since last September.
The dollar has shed 2.5 percent this month, though market
strategists warned that any hints from the Fed about future
exit strategies could squeeze large short dollar positions.
The euro pulled back a bit from a one-year high above $1.48
as U.S. stocks turned negative and was down 0.1 percent at
$1.4768 <EUR=>. Sterling rose 0.3 percent to $1.6407 <GBP=> and
the dollar rose 0.3 percent to 91.42 yen <JPY=>.
News from other central banks showed policymakers are at
least thinking about exit strategies, even if they're not ready
to implement them.
Minutes from the Bank of England's last meeting showed
officials did not press to increase asset purchases, while the
dollar shed 1 percent against the Norwegian crown <NOK=> after
the Norges Bank left rates unchanged but said it had considered
raising them. [].
The New Zealand dollar hit a 13-month high after data
showed the economy unexpectedly exited recession in the second
quarter. It was last up 0.5 percent at $0.7224 <NZD=>.
The Bank of Canada reiterated its pledge to keep interest
rates on hold until mid-2010 but said rates could rise beyond
that, while the European Central Bank's Axel Weber said there
was no need to alter current monetary policy yet.
[] and []
G20 IN FOCUS
Matthew Strauss, senior currency strategist at RBC Capital
Markets in Toronto, said he expects currency issues to be "very
low on the list" of things to discuss for G20 policymakers.
Speculation that the G20 would focus on rebalancing the
global economy, a process that almost certainly calls for a
weaker dollar, also hit the U.S. currency on Tuesday.
But Citigroup strategists said the exchange rate adjustment
that requires the dollar to weaken and the currencies of high
surplus countries, such as Japan and emerging markets like
China, to appreciate has been going on for some time.
They said G20 efforts are likely to focus instead on
diminishing the role of U.S. consumption in the world economy,
reducing Asian savings and boosting European demand.
In an interview on CNBC late Tuesday, Canadian Prime
Minister Stephen Harper echoed that sentiment, saying, "We
cannot hinge future growth simply on an overextended American
consumer." []
(Editing by Kenneth Barry)
