* Dollar steady vs FX basket, weighed by sterling gains
* Stg jumps on BoE mins; Kiwi up on RBNZ Bollard's comments
* Dlr up vs euro, Aussie dollar as equities drop
(Updates prices)
By Jessica Mortimer
LONDON, Oct 21 (Reuters) - Sterling was the focus in the foreign exchanges on Wednesday, its rise to one-month highs against the dollar and euro after Bank of England minutes keeping the greenback steady against a basket of currencies.
The dollar gained against the euro and currencies such as the Australian dollar, however, as lower equities and oil prices discouraged investors from buying currencies seen as riskier.
Sterling jumped after the minutes of the BoE's latest policy meeting dampened expectations of an extension to quantitative easing.
The BoE minutes showed policymakers voted unanimously to leave its quantitative easing programme -- under which the bank buys assets to pump cash into the economy -- unchanged last month. [ID:nLL22561]
"Today is mostly about certain currencies moving on specific stories," said Lee Hardman, currency strategist at Bank of Tokyo-Mitsubishi UFJ.
"The Bank of England minutes shifted the balance of risks in favour of a pause in asset purchases in November, which the pound has reacted to," he said.
The New Zealand dollar also gained after the country's central bank chief Alan Bollard said a strong currency was not necessarily an obstacle to raising the cash rate. [ID:nSYD348934].
At 1150 GMT, sterling was up 1.1 percent at $1.6566
The New Zealand dollar was 0.2 percent higher at $0.7510
Against a basket of currencies, the dollar <.DXY> was steady
at 75.552, though still hovering not far from a 14-month low of
75.103 hit on Tuesday. The euro
Traders said the euro's steep falls against the pound were a factor weighing on euro/dollar, while the single currency remained anchored below the psychologically key $1.50 level which it has so far failed to breach.
Ebbing risk appetite, with European shares down 0.9 percent
<.FTEU3> and oil prices falling more than 1 percent
The higher-yielding Australian dollar fell 0.3 percent to
$0.9208
Investors were also concerned there may be little scope for further falls in the dollar after its recent drop to more than one-year lows against a range of currencies.
"The broader environment is still one that favours dollar weakness, but selling the dollar is becoming a trade of diminishing returns," BTMU's Hardman said.
DOLLAR SENTIMENT STILL NEGATIVE
Many analysts were unconvinced the dollar would sustain any recovery, with sentiment towards it still downbeat on the prospect of U.S. interest rates staying at exceptionally low levels for longer than those of most other major countries.
San Francisco Federal Reserve President Janet Yellen added weight to this view, saying on Tuesday the time for monetary tightening in the United States was still several months away [ID:nN20459802]
"The dollar's carry disadvantage is working to prevent any significant dollar recovery," said Ulrich Leuchtmann, head of foreign exchange research at Commerzbank in Frankfurt.
"Euro/dollar failed to break through $1.50 yesterday, but the downside in the pair is limited and we cannot rule out another attempt at that level".
Jitters remained, however, that policymakers outside the United States may increasingly express disquiet about the strength of their currencies against the sliding U.S. dollar.
On Tuesday, the Bank of Canada killed talk of an early rate hike, warning that favourable economic developments were being undermined by the Canadian dollar's strength and sending the currency down sharply. [ID:nN19231469]
(Reporting by Jessica Mortimer, editing by Nigel Stephenson)