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Yen rallies on risk aversion; NZD hit by jobs data

(Reuters) - The safe-haven yen hovered near a one-month high versus the euro on Thursday, having rallied broadly amid a rout in risk appetite as markets fretted about the U.S. fiscal issues now the presidential election was over.

The euro blipped up in reaction to headlines saying the Greek parliament had approved the government's new austerity measures, which were needed to secure the next tranche of bailout money from international lenders.

But the single currency quickly gave back those gains, following a torrid session overnight that saw it shed nearly 1 percent versus the yen. It was at 102.07 yen, having fallen as far as 101.80, a low not seen since mid-October.

The dollar slid below 80.00 yen, retreating further from six-month highs of 80.68 set last week. It hit a one-week low of 79.76, before clawing back to 79.95.

The rally in the yen came as U.S. stocks finance/markets/index?symbol=us%21spx">.SPX skidded 2.4 percent in their worst performance in over five months, and as U.S. benchmark Treasury yields fell sharply.

"Following President Obama's election victory, we believe markets will begin to price in the eventuality of temporarily going over the fiscal cliff as the likelihood of a short-term compromise declines," Barclays Capital analysts wrote in a client note.

"Reduced chances of a political compromise poses significant downside risk to US/global growth and threaten our long FX carry positions in INR, BRL and RUB, funded with JPY," they added.

Offering some hope, top U.S. Republican John Boehner said House Republicans were willing to work with the White House to avoid the fiscal cliff and said they would accept new revenue under the right conditions.

Markets were now waiting for the outcome of the European Central Bank policy meeting, although no rate move is expected. Spain, which has yet to seek a bailout, is looking to raise up to 4.5 billion euros in the bond market.

Against the greenback, the euro skidded to a two-month low of $1.2736, this in turn helped drive the dollar index .DXY to a two-month high of 80.924.

The Aussie dollar also lost ground against its U.S. counterpart, recoiling to $1.0406 from a seven-week peak of $1.0480.

Still, it remains among the best major performing currency this week after the Reserve Bank of Australia surprised some by not cutting interest rates on Tuesday.

The Aussie's fortunes now hangs on local jobs data due at 0030 GMT. Forecasts centered on a flat outcome and an unemployment rate of 5.5 percent. Any positive surprises should underpin the Aussie, but a weaker-than-expected report could see the currency come under fresh pressure.

Immediate support is seen at the session low around $1.0391, followed by $1.0352, a level representing the 38.2 percent retracement of its Oct 8-November 7 rally.

Investors punished the New Zealand dollar after data showed the country's unemployment rate rose to its highest in more than 13 years in the third quarter.

The kiwi dollar lost about 60 pips in reaction to the data, reaching a one-week low around $0.8177.

"Combined with the previously reported low inflation print for Q3, the RBNZ may consider further cuts to the already low cash rate and NZD intervention may also be a consideration," said Paul Bloxham, chief economist for Australia & New Zealand at HSBC.

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