NZ dollar rises against the US dollar

Sept 15 (Reuters) - The New Zealand dollar posted strong gains on Monday, boosted by a fall in the U.S. currency on heightened concerns over U.S. financial sector.

The kiwi rose about one U.S. cent to above $0.67 as the U.S. dollar tumbled on concerns over the fate of investment bank Lehman Brothers (nyse: LEH - news - people ), which late in the day filed for Chapter 11 bankruptcy protection.

While short-term moves were likely to be swayed by developments in the U.S. financial sector, most analysts said the kiwi's longer-term outlook remained bearish on views the Reserve Bank of New Zealand will cut interest rates further.

The Reserve Bank NZ's unexpectedly large 50 basis point rate cut last week, and their fixation on delivering relief to homeowners, rather than on the persistence of inflation pressures, will ensure that the market continues to look for an open-ended series of cuts,' Westpac Bank analysts said in a note to clients.

NZ bonds strengthened, with the yield on the benchmark 10-year government bond falling six basis point to 5.77 percent, as U.S. Treasuries rallied on safe-haven buying.

The two-year swap rate was at 6.87/90 percent compared with Friday's 6.92 percent.