NZ dollar under fire but regains ground, debt firm

* NZD claws back near-term losses

* Pressure remains, kiwi expected to struggle

WELLINGTON, Nov 2 - The New Zealand dollar regained ground on Monday, pulling away from a one-month low, as profit-taking in high-yield currencies took a pause.

But the kiwi remained mired at three-month lows against the Australian dollar ahead of an expected rise in Australian interest rates which would widen the pair's rate differential.

The New Zealand dollar swung in a broad range, opening weaker and continuing to fall as stock markets slid on concerns about global economic recovery. Later, it clawed back its losses.

Market analysts attributed the decline of the kiwi and other high-yielders to, among other things, profit-taking after a recent strong rally. U.S. lender CIT Group's <CIT.N> decision to file for bankruptcy also hurt investor sentiment.

China's manufacturing data, which showed activity at an 18-month high, helped to counter the negatives, although an analyst said she expected the kiwi to struggle again.

"We suspect factors both locally -- reduced interest rate support -- and offshore's lower risk appetite will conspire against the NZ dollar," said senior currency strategist Danica Hampton of local lender Bank of New Zealand.

The kiwi <NZD=D4> was at $0.7209/16 at 0400 GMT from Friday's late local level of $0.7320/25. The currency traded between a four-week low of $0.7084 and a high of $0.7213.

Hampton saw initial support for the kiwi was at $0.7050 and any said breach of that would open the way for a descent towards $0.6900.

A raft of data and events this week is seen keeping markets on edge, including central bank meetings in Australia, Britain, eurozone and the United States, along with manufacturing data, and U.S. non-farm payrolls at the end of the week.

Locally, there is third-quarter wages on Tuesday, with expectations that wages will rise just 0.3 percent in the three months to Sept. 30. Jobs data on Thursday is expected show the unemployment rising to 6.4 percent from 6 percent. [NZ/POLL]

The NZ Treasury Dept. said on Monday in its monthly commentary on economic indicators that the pace of growth was likely to quicken in the second half. See [ID:nSYD352084]

Government debt was firmer across the curve as investors were attracted by the safe haven of bonds. The yield on the benchmark 10-year bond <NZ10YT=RR> fell 6 basis points to 5.69 percent.