* Kiwi jumps to over 1-mth high on election poll
* Dollar subdued ahead of Fed meeting
* Yen unmoved by Trump’s fiery North Korea rhetoric at the U.N.
* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
By Ritvik Carvalho
LONDON, Sept 20 (Reuters) - The kiwi dollar was the largest mover among major currencies on Wednesday, rising to a 1-1/2 month high after a poll showed New Zealand’s ruling National Party has a wide lead over the opposition ahead of a general election at the weekend.
The other big mover in relatively subdued trading in the G10 group of currencies was the Australian dollar, which gained half a percent after comments overnight from Australia’s central bank outlined the constructive growth conditions for its economy.
Support for New Zealand’s National Party jumped 6 points to 46 percent, according to the One News-Colmar Brunton opinion poll, while support for the opposition Labour party slumped by seven points to 37 percent. Labour had surged in recent weeks.
“Obviously, everything is about the elections this weekend,” said Credit Agricole currency strategist Manuel Oliveri in London.
“Polls this morning showing that the National Party is in the lead once again, so that is actually going against Labour which is taken as a negative for the currency.”
The Kiwi dollar was last up 0.6 percent at $0.7356 after its initial surge to $0.7375. The Aussie dollar was up 0.4 percent at $0.8035.
The dollar retreated as investors awaited the outcome of the Federal Reserve meeting later in the day. The index that measures the greenback against a basket of major currencies was 0.1 percent lower in early European trade.
Analysts expect the U.S. central bank to say at the end of its two-day meeting that it will gradually move to reduce the size of its balance sheet starting in October, and also leave the door open for an interest rate hike at their Dec. 12-13 meeting.
“Despite the likely announcement of the Fed’s balance sheet normalisation, we don’t expect today’s FOMC meeting to have a positive impact on USD,” ING strategists wrote in a note to clients.
“If anything, risks to the dollar are skewed to the downside given balance sheet normalisation was already well telegraphed and should be conducted in a very gradual manner; a likely shift lower in the distribution of dots (within the dotted forecast diagram) given the growing division among FOMC members, and the rising dovish camp.”
The U.S. currency inched 0.1 percent lower against its Japanese counterpart to 111.45 yen.
Currency markets gave a muted reaction to Trump’s speech to the U.N. General Assembly on Tuesday, in which he said the United States will be forced to “totally destroy” North Korea unless Pyongyang backs down from its nuclear challenge.
The euro added 0.1 percent to $1.2007, moving closer to its Sept. 8 high of $1.2092, its highest since January 2015.
European Central Bank policymakers disagree on whether to set a definitive end-date for their money-printing programme when they meet in October, raising the chance that they will keep open at least the option of prolonging it again, six sources told Reuters.
The strong euro, with its dampening effect on inflation, is driving a rift among ECB policymakers, according to sources on the ECB’s Governing Council with direct knowledge of its thinking.
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 (Reporting by Ritvik Carvalho; Additional reporting by Lisa Twaronite in Tokyo; Editing by Hugh Lawson)