* Swiss franc & yen well bid as China worries fester
* NZ dollar rallies after RBNZ hikes rates and signals more
* China industrial production and retail sales data eyed
By Ian Chua
SYDNEY, March 13 Safe-haven currencies the Swiss
franc and yen were in favour early in Asia on Thursday,
consolidating their overnight gains as worries about the health
of the Chinese economy took a toll on risk appetite.
Data showing a surprisingly big tumble in China's exports
last month has spooked investors, who are now waiting for
industrial production and retail sales figures for January and
February, which are due around 0530 GMT.
Any disappointment in those numbers would heighten fears
about a slowdown in the world's second-biggest economy and keep
investors wary of building their exposure to risk.
"We expect modest downside surprises, which are likely to
keep sentiment toward China somewhat negative," analysts at
Barclays Capital wrote in a note to clients.
The dollar last stood at 0.8738 Swiss francs after
falling as far as 0.8731 francs, a low not seen since October
2011. Against the yen, the greenback traded at 102.72,
having earlier hit a one-week low of 102.55.
Lessening the appeal of the dollar was a drop in U.S.
Treasury yields as a result of safety flows. The benchmark yield
slid to a one-week low of 2.71 percent, pulling away
from Friday's peak of 2.82 percent.
The dollar also lost ground against the euro, which
re-tested a 2-1/2 year peak of $1.3915 set last Friday.
The common currency was last at $1.3904.
Traders said ECB Executive Board member Benoit Coeure's
comments that there was no deflation in the euro zone at the
moment had supported the common currency.
However, failure to break above $1.3915 for a second time
suggested the market lacked conviction to push the euro higher.
One stand-out performer was the New Zealand dollar, which
rallied after the Reserve Bank of New Zealand (RBNZ) delivered a
widely expected interest rate hike and flagged that a further
100 basis points of tightening was possible this year.
The RBNZ lifted its cash rate to 2.75 percent from a record
low 2.5 percent.
The kiwi climbed to $0.8527 and was within striking
distance of its Oct. 22 high of $0.8544. A break there could
pave the way to the 2013 high of $0.8676.
"Today's communication strongly suggests the RBNZ will be on
the front foot for the next few meetings," said Michael Turner,
strategist at RBC in Sydney.
"We are therefore bumping up our year-end cash rate forecast
by 25 basis points to 3.5 percent, and expect the RBNZ to get
there via consecutive hikes at upcoming meetings before pausing
to survey the impact."