MSN; NZ dollar falls on RBNZ; Aussie helped by rate talk
* Kiwi dips on RBNZ rate view, but swap rates rise
* Aussie supported by bets of a RBA move next week
* Markets eye 50% chance of a 25bps rate rise from RBA
SYDNEY/WELLINGTON, April 29 (Reuters) - The New Zealand dollar fell on Thursday after the country's central bank said interest rates would rise in "coming months", an outlook too vague for short-term currency speculators.
The tone from the Reserve Bank of New Zealand (RBNZ) was less hawkish than some in the forex market had bet on [ID:nSGE63R0NO] and in marked contrast to Australia, where speculation rates may rise next week helped lift the Australian dollar.
The kiwi dollar was soft at $0.7172, after falling as far as $0.7152 on the RBNZ statement. The Australian dollar was firm at $0.9250, well off the week's low of $0.9136.
"Currency speculators wanted a punchy statement so they could be in and out, they didn't get it so they closed positions," said Imre Speizer, an analyst at Westpac in Wellington.
Yet, a Reuters poll taken after the statement showed the bulk of analysts expect the RBNZ to raise rates by 25 basis points at its next meeting on June 10, from a record low of 2.5 percent now. [NZ/POLL]
That helped New Zealand two-year swap rates to rise to a near three-month high of 4.3 percent. Three-year swap rates hit a 2-1/2-month high of 4.8 percent.
"Rates traders were positioned for the long haul, and while they would have preferred a punchy statement there wasn't enough to make them abandon the longer term trade," said Imre.
Government debt prices <0#NZTSY=> trimmed gains to end flat, and interest rate futures <0#NBB:> dipped.
A rate rise in June would be the first in New Zealand since the start of the global financial crisis, which dragged the nation into a 15-month long recession.
In contrast, Australia had one of its mildest recessions on record. That gave the Reserve Bank of Australia (RBA) room to raise rates in five of its previous six meetings.
Some investors believe it could tighten again next week.
Columnist and central-bank watcher Terry McCrann wrote a 25-basis-point rate rise to 4.50 percent was all but certain given first-quarter inflation data this week showed stubbornly high price pressures.
McCrann has a mixed record on calling moves but has been right enough times for the market to pay attention.
Interest rate investors hurried to price in a 50 percent chance of a RBA move next week.
Bond futures also slid on bets of a RBA move. Three-year bond futures eased 0.02 points at 94.65, and ten-year bond futures lost 0.015 points at 94.25.
That said, more hawkish bets on the RBA did not help the Australian dollar take off against its peer. The Aussie was subdued at NZ$1.2886, well off a near-decade high of NZ$1.3235 hit earlier this month.
Robert Rennie, an analyst at Westpac in Australia, said that was likely due to the considerable uncertainty around future policy moves from both central banks.
Greece's debt crisis may lead the RBA to skip a chance to tighten next week, while an RBNZ comment that rates need not rise as far they had in the past, cast uncertainty over the extent of future rate rises there.
"You've got question marks about when and how much both banks will move," Rennie said. "So traders have cast the trade in the 'too hard' basket at the moment. It's too hard to read."
That saw the spread between two-year Australian and New Zealand swap yields to narrow to 102 basis points. It had hit a record of around 118 basis points earlier in April and has a reasonable correlation with the Aussie-kiwi cross. (Reporting by Koh Gui Qing in SYDNEY and Adrian Bathgate in WELLINGTON)