FOREX-Dollar firm as focus turns to peace talks; Kiwi hit by RBNZ's easy stance

By Rocky Swift

TOKYO, Feb 18 (Reuters) - The dollar was broadly higher on Wednesday as geopolitical risks kept markets on edge and investors awaited minutes from the Federal Reserve for signals on future rate cuts.

The yen slid after U.S. President Donald Trump announced the first tranche of mega-investments Tokyo is making in the United States.

The kiwi dollar slumped after the Reserve Bank of New Zealand held pat on rates and said policy would need to remain accommodative.

The euro was steady after a report that Christine Lagarde is expected to leave as president of the European Central Bank (ECB) before the end of her term.

Iran said progress had been made in nuclear talks with the U.S. in Geneva, while peace negotiations between Ukraine and Russia continued. With many markets in Asia closed for Lunar New Year holidays, investors were looking ahead to the Fed's readout of its last meeting and other key U.S. economic data for trading catalysts.

"We're seeing a bit of dollar strength in context of the FOMC minutes, durable goods, and maybe just squaring up some shorts ahead of that," said IG market analyst Tony Sycamore. "But I just feel like we're in a bit of a holding pattern."

The dollar index =USD, which measures the greenback against a basket of currencies, rose 0.1% to 97.23 after a two-day advance. The euro EUR= slid 0.09% at $1.1842.

The yen JPY= weakened 0.2% to 153.56 per dollar. Sterling GBP= edged 0.1% lower to $1.3554 after a 0.5% slump on Tuesday.

Iran and the U.S. reached an understanding on the main "guiding principles" in a second round of indirect talks over their nuclear dispute on Tuesday, although a deal is not imminent, Iranian Foreign Minister Abbas Araqchi said.

Elsewhere in Geneva, negotiators from Ukraine and Russia concluded the first of two days of U.S.-mediated peace talks in Geneva, with Trump pressing Kyiv to act fast to reach a deal to end the four-year conflict.

"Weaker risk sentiment, because of concerns around renewed geopolitical tensions in the Middle East and volatility in U.S. equity markets, briefly supported the USD," Samara Hammoud, a currency strategist at Commonwealth Bank of Australia, wrote in a note. "However, reports that the U.S. and Iran made progress and reached a 'general agreement' during nuclear negotiations in Switzerland helped ease those concerns."

The Fed's Open Market Committee issues minutes from its January meeting later on Wednesday, while the Commerce Department will release durable goods data for December and on Friday will issue its first estimate for fourth quarter gross domestic product. Chicago Fed President Austan Goolsbee said on Tuesday that the central bank could approve "several more" rate cuts this year, depending on inflation.

British inflation data will be closely watched after a report on Tuesday showed unemployment rose to a five-year high, boosting the case for rate cuts by the Bank of England and triggering a slide in the pound. The UK consumer price index is expected to show growth slowed to 3% year-on-year in January from 3.4% in December. France is also due to report CPI figures.

The ECB said President Lagarde is totally focused on her mission and has not taken any decision regarding the end of her term, responding to a report by the Financial Times that she intended to exit before the French presidential election in April next year.

In Japan, the International Monetary Fund urged the central bank to keep raising interest rates and the government in Tokyo to avoid loosening fiscal policy further. The Trump administration announced three projects valued at $36 billion to be financed by Japan, the first of some $550 billion in projects Tokyo agreed to undertake in order to lower U.S. tariffs.

The Australian dollar AUD= weakened 0.3% versus the greenback to $0.7065, while the kiwi NZD= slumped 0.8% to $0.5996. The RBNZ held its key rate unchanged at 2.25% in its first meeting chaired by Governor Anna Breman, with policymakers saying the monetary stance needs to stay accommodative to support the economic recovery.

In cryptocurrencies, bitcoin BTC= fell 0.1% to $67,610.41, while ether ETH= declined 0.2% to $1,995.96.