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By Bloomberg

New Zealand's dollar slid to the weakest in a year as the central bank signaled possible intervention. A dollar gauge rose to a four-year high amid bets the Federal Reserve will boost interest rates before its peers.

The kiwi slid at least 0.4 percent versus all its 31 major peers after Reserve Bank Governor Graeme Wheeler called the currency's level "unjustified," invoking one of the central bank's criteria for intervention. Australia's dollar also declined. The greenback reached the strongest since July 2013 versus the euro before U.S. reports tomorrow forecast to show economic growth quickened and consumer confidence improved.

"I remain a U.S. dollar bull like everyone else, and the thematic that's taking place and what's caused this move is massive central bank divergence," said Chris Weston, chief market strategist in Melbourne at IG Australia, a unit of IG Group Holdings Plc. The RBNZ is "trying to capitalize on the momentum to try and drive the currency lower," he said.

New Zealand's dollar tumbled 1.1 percent to 79.89 U.S. cents at 6:42 a.m. in London after falling to 79.84 cents, the weakest since Sept. 9, 2013. It has slid 4.5 percent this month.

By Bloomberg

The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 of its major peers, climbed 0.2 percent to 1,061.49, set for the highest close since June 2010.

The dollar gained 0.1 percent to $1.2765 per euro after appreciating to $1.2763, the strongest since July 2013. The U.S. currency rose 0.1 percent to 109.18 yen. The euro was unchanged at 139.36 yen.

Intervention 'Feasible'

"Unjustified and unsustainable are important considerations in assessing whether exchange-rate intervention is feasible," Wheeler said in an unscheduled statement. "Another consideration is whether conditions in the foreign exchange markets are conducive to intervention having an impact on the exchange rate."

Wheeler said July 24 the RBNZ would pause in its rate- tightening cycle after four increases this year. He has been trying to talk the currency down, saying it hasn't reflected a plunge in commodity prices.

"The RBNZ Governor's comment on the 'unjustified and unsustainable' exchange rate is another example of jaw-boning," said Joseph Capurso, a currency strategist at Commonwealth Bank of Australia in Sydney. It would be opportune for the central bank to intervene in currency markets early on Oct. 6, an Australian public holiday, when thin liquidity would amplify the impact, he said.

The Australian dollar dropped 0.8 percent to 88.15 cents after sliding to 88.13 cents, the lowest since Feb. 4.

Dollar Advances

The U.S. dollar rose before reports tomorrow that analysts said will show the world's biggest economy is gaining momentum.

Gross domestic product grew 4.6 percent in the second quarter, more than the previous estimate of 4.2 percent released Aug. 28, according to a Bloomberg survey before the Commerce Department report. The Thomson Reuters/University of Michigan consumer sentiment index rose to 84.8 this month, the highest in more than a year, a separate survey showed.

Traders see a 78 percent chance the Fed will raise its benchmark rate by September 2015, according to data compiled yesterday by Bloomberg based on federal funds futures. That's up from a probability of 73 percent on Sept. 1.

The dollar has strengthened 5.9 percent in the past three months, the best performer of 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The euro dropped 1.6 percent and yen weakened 2 percent.

European Central Bank President Mario Draghi speaks today at a conference in Vilnius, Lithuania on the euro's future. The currency's depreciation is in line with the divergence of monetary policy in Europe from other countries, and policy will "stay accommodative," he said in an interview with Europe 1 radio published yesterday on the ECB's website.

"Just looking at the gap between European and U.S. business confidence, it's clear the euro should be falling and the dollar rising," said Yasuhiro Kaizaki, vice president for global markets at Sumitomo Mitsui Trust Bank Ltd. in New York. "The long-term trend for euro weakness isn't going to change."