FOREX-Aussie rise sparks broad dollar fall to 14-mth lows

                                
 * Dlr hits 14-mth low vs AUD, 15-mth low vs CAD, NZD, CHF
                                
 * Aussie boosted by RBA Stevens' hawkish comments
                                
 * Stronger inflation data pushes kiwi higher
                                
 * Euro climbs to 14-month peak vs dollar
                                
 By Satomi Noguchi
                                
 TOKYO, Oct 15 (Reuters) - The dollar fell to a 14-month low
against a basket of currencies on Thursday as comments by the
head of Australia's central bank encouraged investors to buy the
higher-yielding Australian dollar, which helped other currencies
gain.
                                
 The Reserve Bank of Australia chief said local interest rates
would need to move towards a more normal setting as economic
recovery took hold, reinforcing the view that the country is
heading for a second straight rate hike in November.
[ID:nSYD397384]
                                
 The Aussie pushed higher to a 14-month peak against the
dollar above $0.92, sparking a broad dollar slide that sent the
Canadian dollar to a 15-month high and the euro to its highest
levels since August 2008.
                                
 The New Zealand dollar jumped to a 15-month high versus the
U.S. dollar after stronger-than-expected inflation numbers raised
expectations of a near-term interest rate hike. [ID:nSYD485255]
                                
 "The dollar's slide comes in good market conditions with
stocks rising. So there is no fear involved," said Kosuke Hanao,
head of treasury product sales at HSBC in Tokyo.
                                
 Asian shares tracked Wall Street higher, adding to investors'
appetite for riskier assets. Strong quarterly earnings from
JPMorgan Chase <JPM.N> helped push the Dow Jones industrial
average <.DJI> above 10,000 for the first time in a year.
                                
 The greenback was also under pressure after the minutes of
the latest Federal Open Market Committee meeting suggested that
U.S. interest rates are likely to remain low for some time.
[ID:nWEQ003473]
                                
 The prospect of low U.S. interest rates would encourage
investors to sell the dollar for other higher-yielding currencies
in carry trades, especially if other central banks start lifting
interest rates as their growth picks up.
                                
 "The weak dollar trend is continuing and we are getting more
news that would feed into that momentum," said Tsutomu Soma, A
senior manager of foreign securities at Okasan Securities
                                
 "The FOMC's minutes indicated that U.S. interest rates were
unlikely to rise for a while, while Australia is saying positive
things about its rates. So-called carry trades using the dollar
or the yen are becoming apparent."
                                
 Traders said investors have been increasingly buying the
Aussie after the Australian central bank became the first in the
Group of 20 to raise interest rates last week as the global
financial crisis eases.
                                
 RBA Governor Glenn Stevens' comments on Thursday encouraged
some investors to speculate the next increase might be a hefty 50
basis point move.
                                
 The dollar index, a gauge of the greenback's performance
against six other major currencies, was down 0.4 percent at
75.278 <.DXY>. It earlier dropped as low as 75.249, the lowest
since August 2008.
                                
 The Aussie rose as high as $0.9224 on the Reuters dealing
system, its highest since August 2008, before trading at $0.9215
<AUD=D4>, up 0.6 percent from late New York trade.
                                
 The Canadian dollar, another currency seen as linked to
commodities, rose to a 15-month high against the dollar of
C$1.0208 <CAD=D4>.
                                
 The kiwi rose 0.5 percent to touch a 15-month high of $0.7485
<NZD=D4>. The euro rose 0.2 percent to $1.4956 <EUR=> after
hitting a 14-month high of $1.4961 on trading platform EBS with
traders eyeing the next target at $1.50.
                                
 Some traders said the euro's strength was helped by buying by
emerging economies' central banks diversifying their foreign
reserves, as they have been buying the dollar to prevent their
own currencies from rising sharply.
                                
 The dollar eased slightly against the yen to 89.41 yen <JPY=>
after a short rise earlier, while the euro rose 0.2 percent to
133.70 yen <EURJPY=>.
                                
 The yen briefly ticked a little higher after Japanese Finance
Minister Hirohisa Fujii repeated that countries must not compete
in devaluing their currencies. [ID:nT371160]
                                
 But on the day it lost ground against the Australian dollar,
which climbed to a one-year high of 82.48 yen <AUDJPY=R>, and
against the New Zealand dollar, which also hit a one-year high
just short of 67.00 yen <NZDJPY=R>.
 (Additional reporting by Aiko Hayashi; Editing by Michael
Watson)