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NZ dollar up as stocks gain, eyes Australia rates

Published: 02 Nov 2009 16:25:58 PST

WELLINGTON, Nov 3 - The New Zealand dollar <NZD=> rose to around $0.7200 on Tuesday as stock markets recovered and data pointing to economic recovery improved the demand for high yield currencies.

* Kiwi edges up around a quarter of a cent to $0.7190/00, after a choppy offshore session which saw it between $0.7083 and a high of $0.7269.

* U.S. dollar and yen fell after U.S. data showed sharp improvements in manufacturing, construction and housing, reducing safe-haven demand for the two currencies.

* NZ dollar stuck below A$0.80 against the Aussie <NZDAUD=R> ahead of the Reserve Bank of Australia's rate review at 0330 GMT, which is expected to see the cash rate raised 25 basis points to 3.5 percent, further widening rate differentials with NZ. [AU/INT]

* Kiwi also weaker against the euro <NZDEUR=R> and the yen <NZDJPY=R>, pressuring the trade-weighted index <=NZD>.

* Markets cautious ahead of central bank meetings in Britain, Eurozone and the United States, along with U.S. non-farm payrolls at the end of the week.

* NZ dollar unmoved by local data showing annual wage growth at its slowest rate in eight years in the third quarter, while jobs market looks soft as the economy emerges from recession. See [ID:nWEL94591]. Unemployment numbers due on Thursday are expected show the unemployment rate rising to 6.4 percent from 6 percent. [NZ/POLL]

* Kiwi seen supported near term at $0.7140/50 with resistance at $0.7230. Broader market activity dampened by public holiday in Japan and partial holiday in Australia.

* NZ bonds trade with a mild soft tone after U.S. Treasuries weakened on better-than-expected U.S. manufacturing data. -------------(03 November 2009 13:00 / 0000 GMT)--------------

(Last prices as at 6pm NZ time the previous day) 90-DAY LIVE 2.80 (2.78) NOV-2011 4.268 (4.260) 90-DAY (DEC) 97.15 (97.16) APR-2013 5.049 (5.050) 90-DAY (MAR) 96.87 (96.88) DEC-2017 5.685 (5.680) 90-DAY (JUN) 96.07 (96.08) MAY-2021 5.990 (5.980) RBNZ MCI 217 (216) US 10YR BOND 3.424 (3.407) NZD TWI 64.84 (64.85) AU 10YR BOND 5.622 (5.597) NZD/USD 0.7198(0.7202) NZ/US 10YR SPD +226bp(+227bp) NZD/AUD 0.7947(0.7967) NZ/AU 10YR SPD +6bp (+8bp) NZD/EUR 0.4871(0.4878) NZ 2YR SWAP 4.470 (4.470) NZD/JPY 65.04 (64.85) NZ 5YR SWAP 5.620 (5.620) --------------------------------------------------------------- - (