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NZ dollar recovers from 3-week lows; bonds firm
Reuters - Monday, November 17
WELLINGTON, Nov 17 - The New Zealand dollar <NZD=> clambered off a three-week low hit early on Monday, though sentiment remained weak as a depressing global economic outlook saw investors continue to shun risk.
The kiwi sunk as low as $0.5467 <NZD=D4> in early local trade after the Group of 20 summit at the weekend was seen lacking strong steps to fix the global woes.
The economic outlook, and subsequent reduced appetite for risk, is likely to continue to drive the fortunes of high-yielding currencies such as the kiwi, BNZ currency strategist Danica Hampton said.
"While the uncertainty about the global outlook persists, we expect the New Zealand dollar to continue taking its cues from global equity markets," Hampton said in a note to clients.
At 0400 GMT the kiwi was at $0.5532/38 compared with $0.5633/43 in late local trade on Friday. After opening around its lows the kiwi pushed as high as NZ$0.5556 before retreating to settle near $0.56.
The U.S. dollar and yen both pushed higher following the G20 as investors saw nothing from the summit to encourage a return to riskier assets.
Activity in New Zealand's service sector improved for the first time in four months in October, although it remained at a level indicating contraction in the sector with the economy still in the grip of recession, see: [nWEL348573].
New Zealand food prices rose for the first time in more than a year in October, supported by sharp falls in fruit and vegetable prices.
Data this week includes third-quarter producer prices on Wednesday and October migration figures on Friday.
New Zealand jumped sharply as Asian equity markets began the week lower. The yield on the benchmark 10-year bond <NZ10YT=RR>, which moves inversely to its price, closed 13 basis points lower at 5.79 percent.
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