FOREX-Dollar off lows, kiwi rallies on less dovish central bank stance

* RBNZ cuts interest rates less than some had expected

* Dollar stays above one-week low vs yen touched overnight

* Euro steady as Greece passes second set of bailout steps

* Pound firms as BOE minutes hint at future rate hike

By Lisa Twaronite

TOKYO, July 23 (Reuters) – The dollar crawled off one-week lows against the yen on Thursday, while the New Zealand dollar stole the Asian spotlight and rallied after the central bank there made a smaller cut to interest rates than some investors had expected.

The kiwi dollar climbed to a peak of $0.6654, from $0.6570 before the central bank rate policy decision, and was last up 0.8 percent on the day at $0.6628, moving away from a six-year low of $0.6498 plumbed on July 14.

The Reserve Bank of New Zealand (RBNZ) trimmed rates by 25 basis points, while some investors had expected a more aggressive 50-basis-point cut to counter growing economic headwinds.

“People seem to have been caught short kiwi, and bought it back,” said Kaneo Ogino, director at Global-info Co in Tokyo, a foreign exchange research firm.

“The dollar/yen, too, some people like to buy on dips, and this will support it on any moves to around the 122, 123 level,” he added.

The dollar was flat on the day against the yen at 123.98 yen , holding above a one-week low of 123.57 yen touched in the previous session.

The euro inched up about 0.1 percent to $1.0943, moving back toward a three-month low of $1.0808 set on Monday, as Greece moved closer to resolving the debt crisis that had threatened to pave the way for its exit from the euro zone.

Greek Prime Minister Alexis Tsipras faced down a revolt by rebels in his leftists Syriza party to win parliament’s backing for a second package of reforms required to start talks on a financial rescue deal.

The dollar index, which tracks the greenback against a basket of major currencies, stood at 97.344, down about 0.3 percent on the day but well above its low of 97.108 in the previous session.

U.S. data on Wednesday showed new home resales rose to a 8-1/2 year high, bolstering bets that the Federal Reserve is on track to hike interest rates later this year. The prospect of higher rates enhanced the dollar’s appeal, and propelled it to session highs.

The British pound also got a lift from the prospect of higher interest rates, and was up slightly on the day at $1.5616 .

Minutes from the Bank of England’s July 8 meeting revealed on Wednesday that several policymakers are moving towards voting for the first rate increase following BOE Governor Mark Carney’s recent comments that a hike might happen around the end of year.

Economists predicted that three of nine members of the BoE’s Monetary Policy Committee might vote for a rate hike in August, which could put the central on track for a majority to back an increase later this year or in early 2016.

In other Asian currencies, Indonesia’s rupiah skidded to 13,395 per dollar, its weakest since August 1998.

Source: Reuters

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