FOREX US Dollar slides to 1-year low vs euro before G20

The U.S. dollar slid to a one-year low against the euro on Tuesday just over $1.48 as crumbling sentiment on the U.S. currency prompted selling ahead of a Federal Reserve meeting and Group of 20 summit this week.
Traders took advantage of a dollar rally in the prior session to sell on views the Fed will signal plans to maintain loose monetary policy well into 2010.
Currency investors are also eyeing a meeting of G20 leaders on rebalancing the global economy this week, a process that would almost certainly require a weaker dollar.
A document obtained by Reuters showed how Washington would urge G20 leaders to launch a new push this year to get debtor nations like the United States to save more and exporters like China, Germany and Japan to spend more.
"The big questions will be what will happen at these two meetings, and after that you'll be able to get a stronger view," said Jessica Hoversen, fixed-income and currency analyst at MF Global in Chicago.
"(After) the FOMC meeting if nothing changes, and if the market puts the G20 meeting in the rear view mirror, I think the dollar does tend to trend lower."
The euro was up 0.7 percent at $1.4785 EUR= after options-related demand and strong Asian buying pushed it above $1.48 for the first time since September 2008. The dollar fell 0.9 percent to 91.19 yen JPY= and 0.8 percent to 1.0244 Swiss francs CHF=, near a 14-month low touched earlier.
Sterling rose 0.9 percent to $1.6353 GBP=, while the New Zealand dollar NZD= jumped 1.8 percent, after earlier climbing more than 2 percent to hit a 13-month high after dairy exporter Fonterra raised its estimated payout to farmer shareholders. Fonterra accounts for about 7.0 percent of the New Zealand economy.
With no major economic data on the calendar, traders said $1.4825 may be the next target in euro-dollar, with many predicting an eventual move back to $1.50.
"Every time we get to a round number in euro-dollar, we'll probably try to chip away on the way to $1.50. But for now $1.4825 is the next line in the sand, and then we'll have to wait and see about $1.49," said Steven Butler, head of FX trading at Scotia Capital in Toronto.