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NZ dollar eases as risk appetite ebbs; bonds weak

Published: 26 Oct 2009 17:05:57 PST

WELLINGTON, Oct 27 - The New Zealand dollar dipped to a one-week low on Tuesday as investors avoided riskier assets ahead of a central bank decision on interest rates this week.

* Kiwi <NZD=D4> eases about 10 basis points from local open to be around $0.7450, its lowest since Oct. 20.

* High-yielding currencies like the kiwi pressured by a firmer U.S. dollar, which pushed away from a 14-month low against the euro <EUR=>.

* Risk appetite dampened as Asian stocks follow the lead of Wall St and head lower.

* NZ Prime Minister repeats in Malaysia that a high NZ dollar not helpful for economy but is largely a reflection of the weak U.S. dollar and something NZ is powerless to control. See [ID:nWEL393313]

* Market attention on the Reserve Bank of New Zealand's (RBNZ) rate review on Thursday. Latest Reuters poll shows no change is seen to 2.5 percent cash rate with economists expecting the central bank to start hiking as early as March next year. [NZ/POLL] RBNZ as a minimum expected to drop reference to another possible rate cut, and may even dilute its pledge to keep rates at current level until latter part of 2010.

* Other NZ data this week includes new ANZ Bank-Roy Morgan consumer confidence measure at 0200 GMT Tuesday, National Bank of NZ monthly business confidence on Wednesday, September overseas trade on Thursday, and building consents on Friday.

* NZ dollar seen supported at $0.7425 with initial resistance around $0.7520.

* NZ bonds weaker after markets were closed on Monday for the Labour Day holiday. -------------(27 October 2009 13:05 / 5 GMT)-------------

(Last prices as at 6pm NZ time the previous day) 90-DAY LIVE 2.80 (2.77) NOV-2011 4.545 (4.465) 90-DAY (DEC) 97.08 (97.07) APR-2013 5.325 (5.240) 90-DAY (MAR) 96.54 (96.51) DEC-2017 5.880 (5.790) 90-DAY (JUN) 95.64 (95.57) MAY-2021 6.150 (6.060) RBNZ MCI 390 (400) US 10YR BOND 3.556 (3.395) NZD TWI 67.13 (67.30) AU 10YR BOND 5.802 (5.720) NZD/USD 0.7452(0.7536) NZ/US 10YR SPD +232bp(+240bp) NZD/AUD 0.8135(0.8143) NZ/AU 10YR SPD +8bp (+7bp) NZD/EUR 0.5017(0.5023) NZ 2YR SWAP 4.690 (4.690) NZD/JPY 68.76 (68.68) NZ 5YR SWAP 5.650 (5.650) --------------------------------------------------------------- - (