MSN: NZ dollar steady on risk caution, debt firmer
* Kiwi steady near two-week lows vs U.S. dollar
* Wary on risk amid Greece's fiscal woes
* Two-year swaps may test 4 pct support level
WELLINGTON, Feb 26 (Reuters) - The New Zealand dollar firmed but stayed near two-week lows on Friday as the market remained wary of risk currencies amid prolonged concerns over Greece's fiscal woes and signs of setback in the global economic recovery.
The kiwi traded around $0.6932/42 at 0425 GMT, up from $0.6890/00 late on Thursday and also up on a two-week low of $0.6845 hit in the offshore session.
The kiwi got a boost from the late rebound of U.S. equity markets and January trade data, pushing the currency to test support around $0.6840. [ID:nWEL003967] and [ID:nWEL003966]
"We had good data all week, but the global concern is the dominant factor. Everybody is worried about Greece," said Westpac senior strategist Imre Speizer.
On Thursday, a survey showed local business confidence recovered to its highest level in a decade, but that also failed to rally support behind the New Zealand dollar. [ID:nSGE61O02E]
"Business surveys signal a clear recovery is underway. Yet, there is little proof of it in the data to date," said Bank of New Zealand senior economist Craig Ebert.
The kiwi was weak near a two-week low against the yen , which benefited from safe-haven flows, but recovered from a nine-month low against the Aussie .
The Kiwi/Aussie 2-year swap spread stayed near the widest level in about four months as the Reserve Bank of Australia is expected by many to raise rates at its next policy meeting on March 2.
In New Zealand, analysts are expecting rates to stay at record low of 2.5 percent until June, while markets pricing for the chance of a rate hike in June eased to 84 percent from fully priced due partly to fiscal worries in the euro zone. [NZ/POLL]
Swap yields were lower across the curve, with two-year swaps seen testing 4 percent after breaking below the key 4.2 percent support level this week.
New Zealand government debt was firmer, with the yield on benchmark NZ 10-year bond falling four basis points to 5.775 percent on safe-haven flows amid Greece woes. (Reporting by Mantik Kusjanto; Editing by Balazs Koranyi)
