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NZ dlr gains 2 pct on U.S. dollar weakness; bonds firm

Published: 23 Jun 2009 17:34:07 PST

WELLINGTON, June 24 - The New Zealand dollar <NZD=> climbed more than 2 percent on Wednesday as the U.S. dollar fell, and investor appetite swung back to riskier assets.

* Kiwi opens locally around $0.64, reversing the losses it made in offshore trade on Monday, as the U.S. dollar fell across the board on reduced safe-haven demand.

* The U.S. fall was prompted by speculation the Fed will dampen down expectations for an interest rate rise later this year, and a warning the U.S. credit rating is at risk if the government fails to reduce debt. [ID:nN2381418]

* BNZ says uncertainty surround currency markets, with investors awaiting Thursday's Federal Reserve policy statement for direction.

* Wednesday sees the Westpac-McDemott Miller consumer confidence survey due.

* This week also sees Q1 current account on Thursday, and Q1 GDP on Friday.

* Support for the kiwi seen from $0.6280, with resistance at $0.6455.

* Kiwi generally firmer against the yen <NZDJPY=R>, the euro <NZDEUR=R> and the Aussie <NZDAUD=R>.

* Swaps gain across the curve, with two-year swaps <NZDSM3NB2Y=> at 3.87 percent and five-year swaps <NZDSM3NB5Y=> at 5.35 percent.

* NZ bonds on a bid tone, with local yields flat to one tick lower, as U.S. government bonds gain on a solid auction of two year notes. --------------June 24 snapshot at 9.00 a.m. (2100 GMT)----------

(figures in brackets from June 23) 90-DAY BILLS (SEP) 97.19 (PREV 97.20) 90-DAYS 2.82 (PREV 2.83) 90-DAY BILLS (DEC) 97.10 (PREV 97.09) 07/09 2.65 (PREV 2.65) 90-DAY BILLS (MAR) 96.83 (PREV 96.81) 11/11 3.85 (PREV 3.85) NZD TRADE WEIGHTED 60.42 (PREV 59.76) 04/13 4.85 (PREV 4.85) NZD/USD 0.6394/00 (PREV 0.6273/79) 12/17 6.00 (PREV 6.01) NZD/AUD 0.8055/69 (PREV 0.8007/17) RBNZ MCI -137 (PREV -188) NZD/EUR 0.4541/47 (PREV 0.4530/37) US 10-YR 3.62 (PREV 3.68) NZD/JPY 60.85/94 (PREV 59.81/91) AU 10-YR 5.67 (PREV 5.70) *** SPREADS: NZ/US 10-YR +238 (+233) NZ/AUS 10-YR +33 *** ----------------------------------------------------------------