- RBNZ sends Kiwi 1.7 pct lower; Aussie also falls
- ECB can delay rate hike again: Draghi
- Sterling prepares for more Brexit votes in UK parliament
(Updates rates, comments to U.S. market open; changes byline; changes dateline, previous LONDON)
New Zealand's dollar tumbled on Wednesday, on pace for its worst fall in seven weeks against its U.S. counterpart, after its central bank flagged a possible cut in interest rates, becoming the latest to turn dovish in the face of slowing global growth.
The Reserve Bank of New Zealand (RBNZ) unexpectedly said its next move in interest rates was more likely to be a cut, abandoning its neutral stance at a policy review on Wednesday.
A slowing global economy and abrupt end to U.S. Federal Reserve policy tightening have shifted rate-cut expectations in Asia to probable from possible.
The kiwi NZD= was 1.69 percent lower at $0.6788 and the Australian dollar AUD= followed suit, falling 0.83 percent.
"RBNZ follows the Fed into dovish territory, and it's becoming increasingly clear that there are few central banks that want to be caught on the wrong side of the Fed," Brad Bechtel, global head of FX at Jefferies, said in a note.
"Meaning, why would you remain neutral or hawkish when the Fed is sitting neutral to dovish?," he said.
The Fed abruptly ended three years of monetary policy tightening last week amid signs of an economic slowdown. The European Central Bank, Reserve Bank of Australia and the Bank of Japan have all turned dovish since.
The euro zone is facing a more persistent deterioration of external demand, and the European Central Bank stands ready to further delay a planned interest rate hike if necessary, ECB President Mario Draghi said on Wednesday. Such dovishness has already been priced into the single currency, analysts said.
The euro EUR= was 0.19 percent lower against the greenback.
Elswhere, major currency markets were quiet as risk appetite remained fragile following a sell-off last week triggered by fears of slowing global growth.
"Despite the dovish Fed last week, the trade-weighted dollar continues grinding higher as investors retain concerns about global growth and other central banks retain or shift towards a more dovish bias," ING analysts said in a note.
The Turkish lira TRY= fell about 2 percent against the U.S. dollar, giving back some of the ground it had gained after central bank steps to underpin it after a slip on Friday.
The pound was about flat on the day before a series of indicative votes in the British parliament on how to break the Brexit impasse.
With options including stopping Brexit to a new customs union to Prime Minister Theresa May's existing deal still in the mix, markets doubt there will be a conclusion on Wednesday and the full process of finding an advisory plan could run through Monday.
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