* Euro/dollar hits one-year low on dollar buyback
* Focus shifts back to sluggish growth prospects outside U.S.
* RBNZ cuts rates by a more-than-expected 50 bps, kiwi dives
* Aussie jumps on upbeat jobs data but spike short-lived
By Shinichi Saoshiro
TOKYO, Sept 11 (Reuters) - The dollar advanced to a new
one-year high against the euro on Thursday as investors refocused
on sluggish economic prospects outside the United States,
although worries about the U.S. financial system hung over the
market.
The New Zealand dollar plummeted to a near two-year low
against the dollar after the Reserve Bank of New Zealand cut
interest rates by a bigger-than-expected 50 basis points to 7.5
percent, the second consecutive reduction. []
"The market's direction points toward dollar buying," said
Hideaki Inoue, chief manager of forex trading at Mitsubishi UFJ
Trust Bank.
"What we are witnessing now is position adjustments that are
part of a bigger picture, one in which investors are pulling back
money from risk assets," Inoue said.
The euro dropped 0.1 percent to $1.3954 <EUR=> after touching
a new one-year low of $1.3933. Against the yen, the euro fell 0.5
percent to 149.86 yen <EURJPY=R> after dropping as low as 149.62
yen, a new 13-month low, in a choppy trade.
Euro zone economic growth will halve in 2008 from 2007 and
inflation will be much higher because of financial turmoil,
soaring commodity prices and housing market shocks, the European
Commission said on Wednesday.
It slashed its gross domestic product growth prediction for
the euro zone to 1.3 percent from the 1.7 percent predicted in
April. []
The shift in the market's focus toward weakening growth
outside of the United States enabled the greenback to brush aside
news on Wednesday that Lehman Brothers posted third-quarter
losses and failed to announce concrete plans to raise capital.
Prior to the results release by Lehman, the dollar retreated
against the yen on fears that bad news from the Wall Street bank
could worsen concerns about the U.S. financial sector.
On Thursday, the dollar slipped 0.3 percent to 107.40 yen
<JPY=> but was off the low of 106.58 yen brushed the previous
day.
The New Zealand dollar fell 0.5 percent to $0.6491 after
plunging to $0.6488 <NZD=D4>, its lowest point since October
2006.
RBNZ Governor Alan Bollard said New Zealand's economy is in a
shallow recession but should return to growth by the end of the
year. []
The Australian dollar spiked briefly against the U.S. dollar
and the yen on stronger-than-expected Australian employment data
but the rally was short-lived.
Australian employment rose by 14,600 in August, much higher
than the 5,000 forecast. The country's jobless rate also dipped
to 4.1 percent from 4.3 percent in July. [].
"The Australian economy is unlikely to turn around on this
data alone," said Masafumi Yamamoto, head of foreign exchange
strategy for Japan at Royal Bank of Scotland.
"Some short-covering emerged in a knee-jerk reaction to the
upbeat headline numbers, but such moves are unlikely to derail
the currency's downtrend," Yamamoto said.
The Aussie, which fell to a 13-month low of $0.7945 earlier
in the day, jumped to an intraday high of $0.8020 <AUD=D4> after
the data. It later dropped back to $0.7975.
It lost 0.3 percent to 85.54 yen <AUDJPY=R>, in sight of a
two-year low of 84.98 yen hit last week.
(Additional reporting by Satomi Noguchi)
