* Dollar index near 1-yr low as Fed statement awaited
* NZD surges on growth surprises, lifts Aussie vs USD
* Slight correction expected in USD but weak trend to resume
(Recasts, changes byline, dateline previously TOKYO)
By Emelia Sithole-Matarise
LONDON, Sept 23 (Reuters) - The dollar hovered near a one-year low against a currency basket on Wednesday as its low yield status prompted speculators to sell it before a U.S. Federal Reserve policy decision later in the day expected to keep rates at record lows.
The New Zealand dollar surged to its highest in 13 months against the U.S. currency after the economy unexpectedly pulled out of recession in the second quarter, fuelling expectations the central bank might have to start raising rates sooner than previously thought.
The kiwi smashed through all barriers to rise over a cent to $0.7315, its highest since early August 2008, after gross domestic product (GDP) data showed the economy unexpectedly grew in the second quarter, ending a prolonged recession.
The jump in the kiwi prompted investors to shift more money into other higher-yielding currencies such as the Australian dollar from the U.S. currency, and helped trigger further speculative dollar selling against other currencies such as the euro and the yen.
Data showing the euro zone services sector grew for the first time in 16 months in September and manufacturing output growth increased for the second month running had little immediate impact on the euro as the outcome was already priced into the market.
Some in the market expect a slight pullback in the dollar on some caution ahead of the Federal Reserve statement later in the session and the start on Thursday of a summit of leaders from the Group of 20 nations.
"Overall the FOMC and the G20 are unlikely to disrupt the recent positive tone in asset markets and that's likely to see the trends in currency markets resume," said Ian Stannard, currency strategist at BNP Paribas in London. "I will be looking at the currency pullback I expect today to be very much providing a buying opportunity for the pro-cyclical and commodity currencies," he said.
The dollar index, which measures the dollar's value against a basket of six major currencies, was marginally lower at 76.046, off an earlier low of 75.892, a level not seen last September. Charts indicate the next support level at around 74.70.
The dollar index has shed over 2.5 percent this month as speculators sold the dollar on rising confidence in a global recovery and expectations that U.S. policymakers will keep interest rates at rock-bottom levels for some time while the economy struggles to recover.
Those expectations are likely to get a boost when the Fed ends its two-day policy meeting later in the day. Expectations are growing that the Fed will reiterate its intention to keep a super-accommodative policy for an extended period.
The euro rose past resistance around $1.4825 to a one-year high of $1.4843 on trading platform EBS before slipping back to $1.4794 by 0730 GMT, a touch firmer on the day.
Traders cited talk of a digital option in the euro at $1.48, where the option holder is in line for a payout of 10 million euros if the spot market rate is at that level or higher at the time of the option expiry later in the day.
G20 "FLY IN THE OINTMENT"
The dollar fell as low as 90.47 yen on EBS before crawling back to 90.94 yen, down 0.2 percent from late U.S. trade. Dealers said stop-losses were triggered around the 90.90 yen level, making the drop even sharper.
The dollar fell to a seven-month trough of 90.12 yen last week, nearing the psychologically important 90 yen level.
"Markets are looking very in tune indeed for further gains, all except the U.S. dollar of course, which could be close to a sharp fall," Clifford Bennett, chief economist at Kinetic Securities in Sydney, said in a note.
"The G20 is the fly in the ointment. We need to clear that, which has some risk of strong dollar rhetoric emerging. (The) overall downtrend in the U.S. dollar is likely to persist however."
Leaders at the Group of 20 summit are also expected to call for economic stimulus plans to stay in place, a move which could give a boost to riskier assets.
The Australian dollar, considered a proxy to global growth, jumped to a new 13-month high, tracking gains in the New Zealand dollar and capitalising on U.S. dollar weakness. The Aussie rose to as far as $0.8790 before trimming gains to $0.8742, up 0.1 percent.
The New Zealand dollar stood at $0.7250, up 0.8 percent. (Additional reporting by Rika Otsuka in Tokyo and Anirban Nag in Sydney; Editing by Ruth Pitchford)