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NZ dollar flat but within sight of highs; bonds firm

Published: 22 Oct 2009 17:42:07 PST

WELLINGTON, Oct 23 - The New Zealand dollar remained in sight of 15-month highs on Friday, as attention turned to an interest rate review next week.

* Kiwi <NZD=D4> little changed around $0.7580 after range trading through the offshore session, showing no inclination to revisit the 15-month high of $0.7635 the day before.

* U.S. dollar's brief advance is cut short, as comments by a U.S. policymaker reinforce the market view of the Federal Reserve keeping interest rates low. see [USD/]

* NZ dollar subject of some profit taking, with market talk of Reserve Bank of New Zealand selling and of a hedge fund liquidating a long NZ dollar position. Currency may also be pressured by investors squaring positions as New Zealand heads into a long weekend.

* However risk appetite generally strong, as equity markets in Asia follow Wall St's lead and open firmer.

* Market attention on the Reserve Bank of New Zealand's (RBNZ) rate review next week. A Reuters poll on Friday shows no change is seen to 2.5 percent cash rate but economists widely expect a move to a neutral stance, with the RBNZ dropping a reference to another possible rate cut. [ID:nWEL446888]

* NZ dollar seen supported at $0.7535 with resistance seen near the high of $0.7635.

* NZ bonds take a firm tone, with yields dipping slightly, as U.S. Treasuries were weighed down by worries about pending issuance and firmer stocks. -------------(23 October 2009 13:03 / 3 GMT)-------------

(Last prices as at 6pm NZ time the previous day) 90-DAY LIVE 2.81 (2.77) NOV-2011 4.463 (4.465) 90-DAY (DEC) 97.07 (97.08) APR-2013 5.239 (5.240) 90-DAY (MAR) 96.53 (96.53) DEC-2017 5.790 (5.790) 90-DAY (JUN) 95.64 (95.64) MAY-2021 6.050 (6.060) RBNZ MCI 430 (400) US 10YR BOND 3.436 (3.395) NZD TWI 67.65 (67.30) AU 10YR BOND 5.745 (5.720) NZD/USD 0.7584(0.7536) NZ/US 10YR SPD +235bp(+240bp) NZD/AUD 0.8162(0.8143) NZ/AU 10YR SPD +4bp (+7bp) NZD/EUR 0.5042(0.5023) NZ 2YR SWAP 4.690 (4.690) NZD/JPY 69.29 (68.68) NZ 5YR SWAP 5.650 (5.650) --------------------------------------------------------------- - (