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NZ dollar firmer on risk appetite, eyes jobs data
Reuters - Wednesday, November 5
WELLINGTON, Nov 5 - The New Zealand dollar <NZD=> held firm on Wednesday, as risk appetite surged on firmer equity markets, with investors digesting news Barack Obama had been declared the winner of the U.S. presidential election.
Recovering demand saw the high-yielding kiwi post a two-week high of $0.6130 in offshore trade on Tuesday. The U.S. dollar fell sharply across the board as the prospect of further interest rate cuts from major central banks saw safe-haven plays unwound.
"A sustained improvement in global equities and risk appetite could potentially see a push up towards $0.6250-$0.6300," said BNZ currency strategist Danica Hampton in a note to clients.
At 0400 GMT the kiwi was at $0.6040/51 compared with $0.5861/67 in late local trade on Tuesday. It posted all its gains offshore, sticking to a fairly tight range between $0.6040-$0.6086.
While investors were digesting the impact of Obama's projected election win, they also had an eye on key data releases and interest rate decisions later in the week.
Domestic employment data is due on Thursday, with a Reuters poll forecasting a 0.6 percent fall in employment growth, and the jobless rate rising to 4.3 percent.
There are also interest rate reviews scheduled from the Bank of England and the European Central Bank on Thursday, with both expected to cut rates.
New Zealand holds a general election on Saturday, with polls showing the Labour-led government facing an uphill battle to secure a fourth three-year term. See <NZPOLL>
New Zealand bonds were firmer, but pared earlier gains in line with U.S. Treasuries which faded after equity markets firmed.
The yield on the benchmark 10-year bond <NZ10YT=RR>, which moves inversely to prices, closed 12 basis points lower at 6.01 percent.
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