The dollar slid to a one-year low against a basket of currencies as market players seized on surprisingly strong New Zealand economic growth data as a reason to push the kiwi dollar higher and dump the U.S. currency.

Even as many commodity prices dipped, the dollar's drop has boosted oil and metals and lifted resource-related shares around the region. Commodity-heavy Australian stocks outperformed most other markets in the region, nudging Asian shares to a 13-month peak.

It's a mixture of optimism about global growth and stronger commodity prices, which is particularly good for Australia, said Tom Elliott, a fund manager with MM&E Capital, which oversees about A$50 million in Australian shares.

Stock market activity, however, was limited in Asia, with markets in Japan closed for a third straight day before reopening on Thursday.

European shares were set for a sluggish start, with futures on the Dow Jones Euro Stoxx 50 up just 0.1 percent.

Many investors are waiting for the Federal Reserve's policy decision later in the day, looking for changes in its post-meeting statement that would acknowledge the economy's improvement and might suggest more steps toward winding down its emergency measures to support financial markets.

The Fed has already been meeting with primary bond dealers on Wall Street to discuss different methods for absorbing the massive reserves injected into the banking system to stave off the worst financial crisis since the Great Depression.

The MSCI benchmark of Asia-Pacific shares outside Japan was up 0.4 percent and reached a 13-month high, while the Thomson Reuters index of regional stocks <.TRXFLDAXPU> edged up 0.2 percent.

Australia's S&P/ASX 200 <.AXJO> was up 1.4 percent on the back of a rise in commodity-linked shares. BHP Billiton , the world's biggest miner, rose 1 percent.

Consumer discretionary shares <.MIAPJCD00PUS>, which have played a big role in the MSCI's nearly 60 percent surge in this year, were the biggest sector to rise on the day.

NEW ZEALAND RECESSION ENDS

The New Zealand dollar's jump in early trade triggered a wave of U.S. dollar selling after key levels were breached, prompting more hedge funds and players to build up bets that the U.S. currency is poised for a retreat toward last year's record low.

New Zealand's economy unexpectedly grew 0.1 percent in the second quarter, snapping the country's longest recession on record and stoking expectations that its central bank could start lifting interest rates from record lows early in 2010.

Asia has been at the forefront of the global economy's recovery thanks to China's big stimulus spending and an aggressive slash in inventories during the slide in global trade that left manufacturers better positioned for the rebound.

The dollar was down 0.5 percent at 90.70 yen after tumbling in early trade. Some traders worried that speculators may try to push the U.S. currency below the 90 level and trigger more automatic sell orders expected at around that mark.

The dollar is vulnerable at the moment as it is around key levels against many currencies, hovering in areas where lots of loss-cut selling orders await, said Tohru Sasaki, chief FX strategist for Japan at JPMorgan Chase in Tokyo.

The dollar index, a gauge of its performance against six major currencies, fell to a one-year low of 75.892 <.DXY> in volatile early trade -- a low that was later recalculated due to the sharp moves in the gap between New York and Asia trade.

The euro was up slightly at $1.4810 after jumping as high as $1.4843 on trading platform EBS, a one-year peak.

The kiwi jumped 1 percent to $0.7268 and hit a 13-month high of $0.7315 on the Reuters Matching platform after the growth figures.

New Zealand short-term interest rates were hit hard by the building expectations of a coming rate rise. One-year swap rates rose 7 basis points to 3.23 percent, while the three-year jumped 12 basis points to 4.87 percent.

While the curve steepened on the day, analysts expect short-term rates to keep rising more quickly as a New Zealand rate rise comes into view, causing the swap curve to flatten. The one-year/three-year curve is at 164 basis points, near a record peak of 170 basis points reached in August.

(Additional reporting by Denny Thomas in Sydney and Rika Otsuka in Tokyo; Editing by Jeremy Laurence)

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