* New Zealand dollar slides on dovish tilt
* Euro headed for worst week since mid-December
* Trump meeting keeps greenback in check
* Graphic: World FX rates in 2016 tmsnrt.rs/2egbfVh
(Adds quote, updates prices)
By John Geddie
LONDON, Feb 9 The New Zealand dollar was by far
the biggest faller among major currencies on Thursday, down
almost a full percentage point after its central bank
blind-sided investors by signalling any tightening might be at
least two years away.
The euro also dipped against the dollar, with political
risks, most notably France's upcoming election, nudging it
towards its worst week in nearly two months.
And in a week which has seen the U.S dollar firm broadly,
the greenback was held in check by falling Treasury yields and
lingering concerns that President Trump may reiterate his
opposition to a strong dollar at a meeting with his Japanese
counterpart on Friday.
But the kiwi stole the show for G10 markets, with a dovish
steer from the central bank catching investors off guard after
some recent strong data.
After the bank kept rates on hold at 1.75 percent as
expected, Governor Graeme Wheeler said a protectionist trade
policy from the United States was a major risk to the economy
and that rates could stay as they are for two years or more.
"New Zealand has typically tended to hike as soon as they
get good data. They tend to be quite responsive but they appear
to have learnt from that mistake and will keep rates steady for
a while now," Viraj Patel, a currency strategist at ING, said.
The New Zealand dollar was down 0.8 percent at $0.7208
, pulling away from a three-month high of $0.7375 hit
earlier this week.
The U.S. dollar index against a basket of major currencies
was flat at 100.33, but well off a 2-1/2-month low struck
The euro was down 0.2 percent at $1.068 and has
shed around 1 percent against the dollar this week, on course
for its worst run since mid December.
A poll released Friday confirmed far-right leader Marine Le
Pen looks set to win the first round of France's presidential
election in April, with other polls indicating she will lose the
runoff to centrist Emmanuel Macron.
But in a sign of how far voting intentions have shifted,
Francois Fillon, a conservative who was favourite to win
election only two weeks ago but has seen his campaign damaged by
scandal, is now seen knocked out in the first round.
The dollar gained 0.4 percent against a broadly weaker yen
to 112.37 yen, but analysts said it could be hurt by
further criticism from Trump when he meets Japanese Prime
Minister Shinzo Abe at a two-day summit starting on Friday.
Trump and his top trade adviser Peter Navarro lashed out at
Germany, Japan and China last week, saying the trading partners
were engaged in devaluing their currencies to the disadvantage
of the United States.
"Trump may opt to take a tough stance against Japan amid the
perceived political chaos. Taking such a stance would also set
him up to talk tough with China," said Junichi Ishikawa, senior
forex strategist at IG Securities in Tokyo.
For Reuters Live Markets blog on European and UK stock
markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets
(Additional reporting by Shinichi Saoshiro in Tokyo; Editing by