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NZ dollar slides as risk appetite fades; debt firms
Monday November 2, 10:06 AM
WELLINGTON, Nov 2 (Reuters) - The New Zealand dollar fell to a four-week low on Monday as investors turned away from risky positions such as higher yielding currencies after hefty losses on Wall Street.
* Kiwi NZD=D4 starts new week around $0.7140/50 after hitting an offshore low of $0.7160, the lowest since Oct. 5, as Wall Street suffered its worst slide since July on recovery concerns.
* U.S. dollar and yen rallied as the sell-off in the stock market and uncertainty about economic recovery boosted safe-haven demand for the U.S. and Japanese currencies.
* 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. [ID:nSYD80874]
* Kiwi also at four-week low against the yen NZDJPY=R and weaker against the euro NZDEUR=R, sending the trade-weighted index =NZD 0.3 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.
* 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 3 basis points lower.
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