* Data underpins dollar, though it remains shy of last week's highs
* New Zealand's kiwi soars on strong employment data
* Sterling edges down but buoyant ahead of this week's BoE rate decision
TOKYO, Nov 1 (Reuters) - The dollar edged higher on Wednesday as investors awaited the outcome of the Federal Reserve's policy meeting for clues about future tightening, while the beleaguered New Zealand dollar came roaring back to life on strong jobs data.
The dollar index, which tracks the greenback against a basket of six major rivals, added 0.1 percent to 94.680, though it remained shy of Friday's three-month high of 95.150.
The New Zealand dollar stole the Asian spotlight, soaring 0.9 percent to $0.6906 after touching a one-week high of $0.6915, boosted by data showing the country's jobless rate sank more than expected to a nine-year low of 4.6 percent.
The kiwi had come under pressure in recent weeks on fears of the new Labour-led coalition government's left-leaning policies, including a clamp down on foreign investment and migration.
"The kiwi was oversold on fiscal uncertainty and about what the Labour-led government would be enacting, so the market was short, and prone to squeezes," said Sue Trinh, head of Asia FX strategy at RBC Capital Markets in Hong Kong.
"The reality is that the government is far from the kind of extreme ideology that you see in some places, like in Europe," she said.
Later on Wednesday, the U.S. central bank is expected to leave interest rates unchanged. But investors will be watching for any new indications that the Fed will resume raising rates next month as expected, and the timing of any moves in 2018.
"Market expectations are pretty much in line with the Committee's own projections of one last rate hike this year so there isn't much need for them to wave any flags or otherwise alert people to impending action," Marshall Gittler, chief strategist at ACLS Global said in a report.
Later on Wednesday, Republican lawmakers could also introduce a bill to cut taxes, and the Treasury Department will release its refunding plans. The government is expected to increase the size of its regular auctions as it faces higher funding needs from a widening deficit and as the Fed reduces its balance sheet.
Ahead of U.S. employment data on Friday, other figures gave credence to the view that the economy is gaining momentum.
Consumer confidence jumped to a near 17-year high last month, with households upbeat about the labour market and business conditions, which could underpin consumer spending and boost the economy in the final three months of the year. Other data showed wage growth accelerated in the third quarter.
Ahead of a trip to Asia, President Donald Trump is expected to announce his choice for new Fed chair on Thursday, with news reports tipping Fed Governor Jerome Powell as likely to be nominated to take over when current Fed Chair Janet Yellen's term expires in February.
The dollar added 0.2 percent to 113.85, though it remained shy of its three-month high of 114.45 yen on Friday.
Japanese markets will be closed for a national holiday on Friday, with many investors in Tokyo positioning ahead of that, market participants said, though most were wary of taking aggressive bets before the U.S. jobs data.
As widely expected, the Bank of Japan held policy steady on Tuesday, with inflation still distant from its 2 percent target. BOJ Governor Haruhiko Kuroda stressed that he saw no immediate need to exit its ultra-easy policy even as the Fed and the European Central Bank have started to unwind their stimulus.
The euro edged down 0.1 percent to $1.1632, still nursing its losses after tumbling to a three-month low of $1.1574 on Friday, a day after the ECB said it will extend its bond purchases into September 2018.
The ECB will also trim its monthly purchases by half to 30 billion euros starting in January, leading investors to bet that it won't begin raising interest rates until 2019.
The Bank of England will issue a rate decision on Thursday, that many expect will bring its the first rate hike in more than a decade.
Most economists polled by Reuters expect the central bank to raise its official cost of borrowing to 0.5 percent after last year's 25-basis-point cut in the aftermath of the vote for Brexit.
Sterling edged down 0.1 percent against the dollar to $1.3274, after hitting a more than two-week high of $1.3293.
Bitcoin scaled a record high after CME Group Inc , the world's largest derivatives exchange operator, said on Tuesday it will launch a futures contract for the cryptocurrency later this year. (Reporting by Lisa Twaronite; Editing by Eric Meijer & Shri Navaratnam)