NZ dollar, bonds on hold before non-farm payrolls

Yahoo! Australia & NZ Finance

Friday 5 November 4:22 PM

NZ dollar, bonds on hold before non-farm payrolls

AUCKLAND, Nov 5 (Reuters) - The New Zealand dollar NZD= and government bonds were largely on hold on Friday as markets awaited the outcome of U.S. non-farms payrolls data.

Economists forecast U.S. non-farm payrolls to rise by 169,000 in October, compared with a rise of 96,000 in September, according to a Reuters poll.

The data is likely to prove an important indicator for direction in a market eager for confirmation as to whether or not the U.S. dollar's post-election weakness is justified.

The kiwi had traded in a very tight $0.6902-15 range and bonds were little changed across the yield curve.

By 6 p.m. (0500 GMT) the kiwi was at $0.6904/11, up from $0.6886/96 in late trade on Thursday.

"The (U.S.) dollar has been under a lot of pressure over the last two days since the election, so if we see some bad data tonight we might see a break up to that 1.30 level in the euro EUR=," Basil Payn, head of spot foreign exchange at Westpac Institutional Bank, said.

Both the Australian and New Zealand dollars could break substantially higher as a consequence, he said.

"But on the other hand if the data is good, then we could see a bit of a retracement because the market is getting reasonably short U.S. dollars," he said.

Support for the kiwi is expected at around $0.6880 with resistance at $0.6950.

Among the day's releases was data showing New Zealand's fiscal surplus was still running ahead of forecasts in three months to Sept. 30.

The government's operating surplus for the quarter was NZ$1.57 billion ($1.08 billion) -- NZ$289 million ahead of forecast, the Treasury said.

New Zealand's trade deficit for September narrowed marginally, but remained at its largest level in five years as exports of key dairy items fell.

The deficit was revised to NZ$1.01 billion ($697 million) from the previously advised NZ$1.02 billion, Statistics New Zealand said. Neither the trade nor the fiscal data had any market impact.

Bonds, like the currency, were little changed before the U.S. data, with November 2006s ending at 6.08 percent, the July 2009s at 6.00 percent and the April 2013s at 6.03 percent, all steady.

Later Story:	Higher rates bite into NZ housing confidence-survey (Reuters)
Earlier Story:	Telecom pulls NZ shares off record high (Reuters)