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NZ dollar steady ahead of Fed meeting

Published: 03 Nov 2009 18:09:46 PST

WELLINGTON, Nov 4 - The New Zealand dollar <NZD=> was steady on Wednesday, with higher dairy prices supporting the currency amid broader caution over risky assets ahead of the Federal Reserve's policy-setting meeting.

* Kiwi settles around $0.7222/28, hovering in tight ranges between $0.7206 and $0.7226.

* Kiwi well supported above $0.72 as Fonterra, NZ's top export earner, reports a 13.7 percent rise in dairy prices at its latest auction, pointing to a strengthening in demand. [ID:nWEL459929]

* U.S. dollar steadies, having hit a one-month high on a basket of currencies as concerns about the global banking sector re-ignite safe-haven demand.

* Markets cautious ahead of a slew of central bank meetings this week. The U.S. Federal Reserve starts a two-day meeting on Tuesday and the European Central Bank and the Bank of England hold policy meetings later in the week. [ECB/INT] [BOE/INT]

* NZ dollar still below A$0.80 <NZDAUD=R> after the Reserve Bank of Australia's (RBA) decision to raise rates by 25 basis points to 3.50 percent on Tuesday.

* But fears of a rapid widening of the yield gap between NZ and Australia eased after the RBA said it expected to gradually lessen its stimulus of the economy and sounded less hawkish than some had bet [ID:nSYD339317]

* Kiwi steady against the euro <NZDEUR=R> and the yen <NZDJPY=R>, keeping the trade-weighted index <=NZD> flat.

* Kiwi seen supported near term at $0.7100 with resistance at $0.7270.

* NZ bonds a touch firmer, while the U.S. government securities prices slid ahead of the Fed meeting. -------------(04 November 2009 12:50 / 2350 GMT)---------------

(Last prices as at 6pm NZ time the previous day) 90-DAY LIVE 2.81 (2.80) NOV-2011 4.255 (4.270) 90-DAY (DEC) 97.17 (97.15) APR-2013 5.040 (5.065) 90-DAY (MAR) 96.91 (96.88) DEC-2017 5.690 (5.695) 90-DAY (JUN) 96.11 (96.07) MAY-2021 5.990 (5.995) RBNZ MCI 234 (225) US 10YR BOND 3.469 (3.418) NZD TWI 65.05 (64.95) AU 10YR BOND 5.650 (5.527) NZD/USD 0.7209(0.7208) NZ/US 10YR SPD +222bp(+228bp) NZD/AUD 0.7981(0.7992) NZ/AU 10YR SPD +4bp (+17bp) NZD/EUR 0.4898(0.4876) NZ 2YR SWAP 4.470 (4.470) NZD/JPY 65.14 (65.00) NZ 5YR SWAP 5.620 (5.620) --------------------------------------------------------------- - (