* U.S. GDP and jobless claims data has little FX impact
* NZ dollar jumps vs dollar, yen
* Dollar down after volatile moves on Geithner remarks
(Recasts, adds comment, updates prices, changes byline and
dateline, previous LONDON)
By Nick Olivari
NEW YORK, March 26 (Reuters) - The dollar fell against most
major currencies on Thursday, with investors reluctant to take
big bets as U.S. Treasury Timothy Geithner was due to make
another appearance before a Congressional committee.
The market showed little reaction to Geithner's prepared
remarks for the hearing before the House of Representatives
Financial Services Committee, which is about financial
regulation reform. Investors were waiting for the question and
answer session that was to be part of the hearing, which is due
to start at 10 a.m. EDT (1400 GMT).
"There is tremendous uncertainty over additional comments
clarifying the U.S. Treasury Secretary's position over studying
the replacement of the U.S. dollar as a reserve currency," said
Andrew Busch, global FX strategist at BMO Capital Markets in
Chicago.
The dollar swung wildly on Wednesday after Geithner said he
was open to expanding the use of the International Monetary
Fund's Special Drawing Rights (SDRs).
New Zealand's dollar gained roughly 2 percent against the
U.S. dollar and yen, lifting other yen crosses, as investors
searching for yield took the view that interest rates there
were at or very near the bottom.
Data on U.S. Gross Domestic Product and weekly jobless
claims had little impact on trading. [] and
[]
In early New York trade, the euro was up 0.2 percent at
$1.3605 <EUR=>. A broadly sliding yen pushed the dollar up 0.7
percent to 98.22 yen <JPY=>, while the euro rose 0.9 percent to
133.65 yen <EURJPY=>
The yen has slid against high-yielding currencies in the
past few weeks as gains in global stock markets have pointed to
an improvement in investors' risk appetite.
But the focus remained on the greenback after the U.S.
currency was rocked after Geithner's comments on Wednesday.
Sterling rose 0.3 percent against the dollar <GBP=>, while the
dollar was down 0.7 percent against the Norwegian crown
<NOK=>.
Geithner's comments were initially interpreted as an
endorsement of China's proposal this week to eventually replace
the dollar as the world's reserve currency with SDRs.
[]
That pushed the dollar lower but it then regained ground
after he said the dollar would keep its status as the top
reserve currency for a long time. []
Analysts said the comments had, by accident or design,
opened a debate on how the dollar will cope with massive fiscal
stimulus pumping into the U.S. economy.
KIWI SURGES
The kiwi surged to its highest in more than two months at
$0.5801 <NZD=> and touched around more than four-month peak of
57.04 yen <NZDJPY=R>, according to Reuters data, as New Zealand
government debt yields surged in a sign investors were reining
in expectations for lower rates.
New Zealand's cash rate stands at 3 percent and the central
bank has signalled it does not expect to reduce rates much
further.
"While yield differentials have narrowed, you are also
buying at lower levels so it is slightly more attractive than
in the past," said John McCarthy, director of foreign exchange
at ING Capital Markets in New York. "But the idea of going to
re-enter the yen to borrow is dead. It's more bearish on the
yen, bullish on the aussie and the kiwi."
The Australian dollar was down around 1.4 percent against
the New Zealand dollar at NZ$1.2135 <AUDNZD=R>, hovering near a
10-week low and adding to broad strength in the kiwi. The
Australian dollar was up 1.5 percent against the yen at 69.01
<AUDJPY=R>.
But some analysts were sceptical on the rate outlook.
"Since the RBNZ took rates down to 3 percent, markets have
priced out more easing. We view this as misplaced, with Q4 GDP
due tonight set to show a large -1.1 percent Q/Q fall,
intensifying New Zealand's plight," ING said in a note to
clients.
(Additional reporting by Veronica Brown in London, Editing by
Chizu Nomiyama)
