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NZ dollar near four-week lows as risk weighs

Published: 01 Nov 2009 17:24:28 PST

WELLINGTON, Nov 2 - The New Zealand dollar <NZD=> held near four-week lows on Monday as risk aversion rose following hefty losses on Wall Street.

* Kiwi <NZD=D4> around $0.7139/49 after hitting a low of $0.7083, the lowest since Oct. 2, as equities tracked Wall Street's worst slide since July on recovery concerns.

* U.S. dollar and yen rallied as the sell-off in stock markets and uncertainty about economic recovery boosted safe-haven demand. Asian stock markets slipped.

* Kiwi fell sharply late last week after the Reserve Bank of New Zealand left rates on hold at 2.50 percent while indicating it was in no hurry to tighten monetary policy. Kiwi is still up more than 20 percent since the start of the year.

* Kiwi also at four-week low against the yen <NZDJPY=R> and weaker against the euro <NZDEUR=R>, sending the trade-weighted index <=NZD> 0.6 percent lower.

* NZ dollar falls below the A$0.80 level for the first time in nearly three months against the Aussie <NZDAUD=R> ahead of the Reserve Bank of Australia's rate review on Tuesday when it is expected to raise rates by 25 basis points, further widening rate differentials with NZ. [AU/INT]

* Wall Street's favourite measure of investor fear, the CBOE Volatility Index <.VIX>, soared 24 percent -- its biggest one-day percentage gain since October 2008.

* No major data due in NZ on Monday. Other focus include the local September quarter's wage and unemployment data this week. For poll details, see [NZ/POLL]

* Kiwi seen as vulnerable after falling through support levels. Initial support seen around $0.7050 with resistance at $0.7250.

* NZ bonds firmer after U.S. Treasury debt prices were bolstered by safe-haven buying following sharp falls in Wall Street. Local yields up to 6 basis points lower. -------------(02 November 2009 12:46 / 2346 GMT)-------------

(Last prices as at 6pm NZ time the previous day) 90-DAY LIVE 2.78 (2.79) NOV-2011 4.270 (4.330) 90-DAY (DEC) 97.15 (97.17) APR-2013 5.030 (5.100) 90-DAY (MAR) 96.89 (96.87) DEC-2017 5.665 (5.720) 90-DAY (JUN) 96.09 (96.03) MAY-2021 5.965 (6.015) RBNZ MCI 179 (283) US 10YR BOND 3.388 (3.494) NZD TWI 64.38 (65.71) AU 10YR BOND 5.517 (5.620) NZD/USD 0.7130(0.7320) NZ/US 10YR SPD +228bp(+223bp) NZD/AUD 0.7953(0.7990) NZ/AU 10YR SPD +15bp (+10bp) NZD/EUR 0.4848(0.4929) NZ 2YR SWAP 4.470 (4.490) NZD/JPY 63.94 (66.69) NZ 5YR SWAP 5.710 (5.710) --------------------------------------------------------------- - (