FOREX-Dollar edges lower before Fed statement

    * Investors await Fed policy statement at 2 p.m. (1800 GMT)
    * Mexican peso rebounds after losses tied to major
earthquake
    * Kiwi jumps as poll shows National Party leads before
election

 (Updates market action, changes dateline, previous LONDON)
    By Richard Leong
    NEW YORK, Sept 20 (Reuters) - The dollar edged lower on
Wednesday, as investors waited to see whether the Federal
Reserve would signal it may raise interest rates again later
this year even as inflation has remained below its 2 percent
goal. 
    The U.S. central bank is expected to release its latest
policy statement at 2 p.m. (1800 GMT) after a two-day meeting
where investors expected policymakers would decide to embark on
a reduction of the Fed's $4.5 trillion balance sheet in October.

    Fed officials for weeks have signaled a move to shrink the
U.S. central bank's holdings of Treasuries and mortgage-backed
securities.
    "It's not going to be so significant for the dollar at this
stage," said Shaun Osborne, chief currency strategist at
Scotiabank in Toronto.
    What will drive the greenback in coming weeks will be the
Fed's confidence on whether inflation would reach its 2 percent
target and how many further rate increases it expects to carry
out.
    The recent deadly hurricanes that caused catastrophic damage
in two southern U.S. states might force the Fed to postpone a
rate increase until next year, analysts said.
    "The impact of the hurricanes may delay an increase so
that's a risk," Osborne said.
    The index that measures the greenback against a basket of
six major currencies was 0.07 percent lower at 91.732 and not
far from the 2-1/2-year low struck on Sept. 8. 
    The index has slid more than 11 percent this year, as
expectations for pro-growth, pro-inflation policies from U.S.
President Donald Trump have diminished, complicating the Fed's
monetary policy path.
    The futures market implied traders saw a 57 percent chance
of a December rate increase, little changed from
on Tuesday, CME Group's FedWatch tool showed. 
    The New Zealand dollar gained 0.8 percent at
$0.7378 after reaching its highest level in 6-1/2 weeks as one
poll showed the country's National Party pulled ahead of the
rival Labour Party ahead of a general election this weekend.    
 
    Support for the 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.
 
   
    Among emerging market currencies, the Mexican peso
recovered from Tuesday's losses spurred by a second deadly
earthquake that struck the country in two weeks.
    The Mexican currency was last up 0.5 percent at 17.71 peso
per dollar following a 0.2 percent decline on Tuesday.
    
    
========================================================
    Currency bid prices at 10:41AM (1441 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1999        $1.1992     +0.06%         +14.13%     +1.2020     +1.1987
 Dollar/Yen       JPY=        111.4400       111.5800    -0.13%         -4.65%      +111.6400   +111.2400
 Euro/Yen         EURJPY=     133.71         133.82      -0.08%         +8.58%      +134.0100   +133.5100
 Dollar/Swiss     CHF=        0.9625         0.9625      +0.00%         -5.43%      +0.9634     +0.9596
 Sterling/Dollar  GBP=        1.3567         1.3507      +0.44%         +9.98%      +1.3607     +1.3497
 Dollar/Canadian  CAD=        1.2256         1.2288      -0.26%         -8.74%      +1.2300     +1.2235
 Australian/Doll  AUD=        0.8064         0.8009      +0.69%         +11.77%     +0.8071     +0.8000
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1547         1.1543      +0.03%         +7.74%      +1.1557     +1.1523
 Euro/Sterling    EURGBP=     0.8842         0.8877      -0.39%         +3.80%      +0.8888     +0.8827
 NZ               NZD=        0.7385         0.7317      +0.93%         +6.40%      +0.7388     +0.7304
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        7.7874         7.7982      -0.14%         -9.84%      +7.8122     +7.7746
 Euro/Norway      EURNOK=     9.3445         9.3532      -0.09%         +2.85%      +9.3705     +9.3328
 Dollar/Sweden    SEK=        7.9408         7.9503      -0.08%         -12.81%     +7.9605     +7.9327
 Euro/Sweden      EURSEK=     9.5281         9.5356      -0.08%         -0.54%      +9.5455     +9.5242
    

    
 (Additional reporting by Abhinav Ramnarayan and Ritvik Carvalho
in London; Editing by Meredith Mazzilli)
Our Standards:The Thomson Reuters Trust Principles.
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