Dollar hovers near year low before Fed

       The dollar hovered near its weakest for a year against a currency basket yesterday before a US Federal Reserve policy decision later in the day expected to keep interest rates at record lows.
       The euro pulled back slightly from a one-year high struck against the dollar earlier with stronger than forecast euro zone manufacturing, services activity and industrial new orders having little immediate impact as the market had largely priced in improvement in the sector.
       The New Zealand dollar surged to its highest in 13 months against the US currency after the economy unexpectedly pulled out of recession in the second quarter, fuelling expectations the central bank might have to start raising rates sooner than previously thought.
       The kiwi smashed through all barriers to rise more than a cent to $0.7315,its highest since early August 2008, after gross domestic product (GDP) data showed the economy unexpectedly grew in the second quarter, ending a prolonged recession.
       The jump in the kiwi prompted investors to shift more money into other higher-yielding currencies such as the Australian dollar from the US currency,and helped trigger further speculative dollar selling against other currencies such as the euro and the yen.
       The dollar index, which measures the dollar's value against a basket of six major currencies, was 0.1% lower at 76.022 by 0917 GMT, off an earlier low of 75.892, a level not seen since last September. Charts indicate the next support level at around 74.70.