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NZ dollar near 10-day lows on fresh econ worries

Published: 02 Jul 2009 17:17:21 PST

WELLINGTON, July 3 - The New Zealand dollar <NZD=> languished near 10-day lows on Friday, after falling nearly 2 percent in offshore trade after weak U.S. jobs data saw investors offload riskier plays in higher-yielding currencies.

* Kiwi trades around $0.6278/84 after hitting a low of $0.6263, its weakest since June 23. The kiwi had retreated from a high of $0.6415 after the poor jobs data saw cash flow into safe-haven currencies like the U.S. dollar and yen.

* U.S. employers shed 467,000 jobs in June, far more than expected, with the unemployment rate rising to 9.5 percent [ID:nN01210643], renewing doubts about economic recovery.

* European Central Bank (ECB) left rates unchanged at 1 percent, but euro pressured by comments from ECB head Jean-Claude Trichet that growth in the euro zone will be weak for the rest of the year. See [ID:nL2512532]

* Domestic factors also hurting the kiwi, with analysts pointing to NZ$4.5 billion in NZ dollar denominated bonds maturing this month amid fears that much of it will not be rolled over [ID:nWEL46118]. Outlook for key dairy export sector also looks weak after latest Fonterra auction sees prices down 3 percent. [ID:nWEL508383]

* Data showed NZ government's fiscal position was better than forecast in May thanks to improved returns from investment funds, although the prolonged recession saw the accounts remain deeply in deficit [ID:nWEL000943].

* Analysts say further falls in kiwi could trigger stop-loss sales because of large speculative long positions in NZ dollar. * Kiwi also soft against the Aussie below A$0.80, after hitting a near three-week low on Thursday, euro <NZDEUR=R> and the yen <NZDJPY=R>. NZ dollar trade weighted index <=NZD> down around 1.2 percent.

* Kiwi seen supported at $0.6250 with resistance at $0.6330.

* NZ swap rates lower across the curve, with two-year swaps <NZDSM3NB2Y=> six basis points down at 3.69 percent and five-year swaps <NZDSM3NB5Y=> four basis points lower at 5.18 percent.

* NZ bonds steady after opening firmer with yields up to six basis points lower, tracking higher U.S. Treasuries. ---------------July 3 snapshot at 12.45 p.m. (0045 GMT)----------

(figures in brackets from July 2) 90-DAY BILLS (SEP) 97.21 (PREV 97.21) 90-DAYS 2.80 (PREV 2.82) 90-DAY BILLS (DEC) 97.13 (PREV 97.12) 07/09 2.64 (PREV 2.60) 90-DAY BILLS (MAR) 96.89 (PREV 96.88) 11/11 3.69 (PREV 3.73) NZD TRADE WEIGHTED 59.52 (PREV 60.96) 04/13 4.67 (PREV 4.72) NZD/USD 0.6278/84 (PREV 0.6388/92) 12/17 5.80 (PREV 5.87) NZD/AUD 0.7914/26 (PREV 0.7908/20) RBNZ MCI -211 (PREV -151) NZD/EUR 0.4494/99 (PREV 0.4522/27) US 10-YR 3.50 (PREV 3.54) NZD/JPY 60.06/14 (PREV 61.66/74) AU 10-YR 5.52 (PREV 5.52) *** SPREADS: NZ/US 10-YR +230 (+233) NZ/AUS 10-YR +28 *** ----------------------------------------------------------------