FOREX-Kiwi sinks on central bank comments, dollar gains

(Recasts after start of European trading, changes dateline from previous TOKYO/SYDNEY)

* New Zealand dollar hammered by hint at lower rates

* U.S. dollar broadly higher, seeking trigger for new rally

By Patrick Graham

LONDON, April 23 (Reuters) - The New Zealand dollar was by far the biggest mover on major currency markets on Thursday, sinking 1.5 percent after a senior central banker pointed to the need for lower, not higher, interest rates.

The dollar was back on the up, making its second push this week past $1.07 per euro, bang in the middle of a range it has held since early March, while the Swiss franc recovered from new moves by Swiss authorities to weaken the currency.

Reserve Bank of New Zealand Assistant Governor John McDermott sent the kiwi spiralling lower with his warning that weakening demand and lower price risks might warrant lower rates.

Weakening global demand for its commodities and in particular a slowdown in China have undermined the outlook that saw New Zealand as the first developed economy to raise interest rates since the 2008 financial crash.

The fall also follows a big slide for the Aussie dollar earlier this week.

"Because the kiwi has been put on a pedestal as the carry trade of choice over the last six months, those comments (by McDermott) have had a big impact this morning," said Adam Myers, European head of FX strategy at Credit Agricole (Swiss: ACA.SW - news) in London.

"It is a pretty easy way for the Reserve Bank to try and ensure that New Zealand does not lose out competitively with Australia."

By 0736 GMT, the kiwi looked to be bottoming out around 1.4 percent weaker at $0.7559. Against the Aussie it traded 1.2 percent weaker at NZ$1.0224, having neared parity this week.

Early PMI purchasing manager survey indicators were weak in Europe, helping to prod the euro almost 0.5 percent lower against the dollar at $1.0682.

The big question, after six weeks of relatively steady trading, is where the next trigger for a still widely expected further rise for the U.S. currency will come from.

Short-term U.S. yields have begun to inch higher and a better batch of jobs numbers at the start of May would strengthen bets on a rise in U.S. interest rates this year and likely see the dollar jet higher.

The dollar gained 0.4 percent to 98.347 , against a basket of six major currencies.

"The near-term focus for USD crosses has been primarily on the idiosyncratic risks associated with many of the other G10 currencies," analysts from ING said in a note to clients.

"Today's initial jobless claims and new home sales data may command some attention, but are unlikely to have any material impact and we see DXY continuing to trade within a tight range of 97.50-98.50." (Additional reporting by Hideyuki Sano in Tokyo and Ian Chua in Sydney; Editing by Gareth Jones)