* NZ dollar falls sharply after RBNZ sounds less hawkish
* RBNZ lift rates again but presses pause button
* G3 currencies sidelined in absence of fresh drivers
* Next focus on China PMI, due 0145 GMT
By Ian Chua
SYDNEY, July 24 The New Zealand dollar skidded
to a six-week low on Thursday after the country's central bank
switched to a wait-and-see stance following its fourth straight
rate hike, while other major currencies snoozed.
The kiwi dollar dropped nearly a full U.S. cent to as low as
$0.8606, touching levels not seen since June 12. In
contrast, the euro was stuck at eight-month lows around
$1.3461, leaving the dollar index hovering at a six-week
peak set on Tuesday.
Against the yen, the U.S. dollar firmed a tad to 101.54
, continuing to recover slowly from last Friday's low of
101.09. The euro was little changed at 136.67, having
reached a near six-month trough at 136.41 on Wednesday.
An absence of any meaningful U.S. or European data was seen
as partly to blame for the uninspiring performance in the major
currencies. But persistent expectations for further stimulus in
the euro zone appeared to be taking a toll on the common
Worries about tougher sanctions on Russia and the potential
impact that might have on the euro zone's already shaky outlook
did not help the euro.
Risk appetite in the wider markets was also somewhat curbed
by conflicts in Ukraine and the Gaza Strip, although bullish
results from Apple Inc helped lift the benchmark S&P
500 index to a record closing high.
The Reserve Bank of New Zealand (RBNZ) raised its cash rate
by 25 basis points to 3.5 percent early on Thursday and pushed
the pause button, saying the economy appeared to be responding
to higher rates as intended.
The move was not a complete surprise given many have been
questioning the need for more tightening in the face of a high
currency, restrained inflation and falling diary prices, the
country's biggest export earner.
Yet the reaction in the kiwi was swift and savage with
investors knocking the currency from around $0.8703 to $0.8606.
It last traded at $0.8613.
"Perhaps the main surprise was the language regarding the
high NZD exchange rate. 'There is potential for a significant
fall' opens to interpretation as a veiled intervention threat,"
said Imre Speizer, senior strategist at Westpac in Auckland.
Analysts at Citi said it is unusual for a central banker to
make such blunt comments about the currency and showed a high
level of frustration with the strong kiwi.
The Australian dollar ceded a bit of ground versus the
greenback in sympathy with its kiwi peer, dipping to $0.9443
from a three-week high of $0.9463.
The near-term outlook for the Antipodean currencies now
rests on the outcome of a survey on China's vast manufacturing
sector due at 0130 GMT. Any disappointment will no doubt given
kiwi bears a fresh excuse to attack the currency.
(Editing by G Crosse)