$NZ and pound are firmer

Press, 30 January 1986, Page 24

$NZ and pound are firmer

PA Wellington The New Zealand dollar closed firmer at $U50.5290/05, compared with its opening of 5U50.5265/80 on the foreign exchange market yesterday. Dealers said many exporters entered the market after the kiwi was sold down between US53c in late London and early New York trading. Although exporter demand sent the kiwi up to a peak U553.35C at lunchtime, it was then well offered and moved quietly between U552.90C and U553.15C. One dealer said there could have been a large importer order which brought the kiwi down from its day’s high. Much of the market was caught holding long positions, having expected the kiwi to rise to U553.50C. Normal month-end importer demand for the United States dollar was putting some selling pressure on the kiwi.

The Reserve Bank’s trade-weighted exchange rate index was at 65.7 at 3 p.m., up from 65.2 at 9 a.m. but down from 66.2 at 3 p.m. on Tuesday.

Other wholesale values for the kiwi in late trading were Aust74.3c, 1.26 marks, 37.6 p and 102.8 yen.

Most foreign exchange action yesterday centred on the United States dollar-yen rate. At one stage in Asian trading the US dollar fell

to a seven-year low of 193.85 yen. It closed in New Zealand at 193.95/00 yen—down from its 195.45/55 yen local opening. Tokyo dealers said the market had dismissed the possibility of a Japanese discount rate cut and Wellington dealers said people were buying the yen now, before it reached the 190 a dollar rate which the Japanese Finance Minister, Mr Noboru Takeshita has said is acceptable.

The United States dollar also closed weaker in New Zealand at 2.3875/85 marks from its local opening of 2.3935/ 50.

Sterling finished at $U51.4085/95 from its opening of 5U51.4070/85 and the Australian dollar closed at 5U50.7134/41 from $U50.7141/48.

In London, sterling closed off the day’s highs but was up sharply from Monday’s finish on the back of firmer oil prices and a perception that confidence in the Government had been largely restored.

The American dollar ended at 2.3965/75 marks and 195.50/60 yen against 2.3980/90 and 195.77/87 at Monday’s European close.

Sterling closed at $U51.4060/70 and 3.3760/ 820 marks, against 5U51.3915/30 and 3.3370/ 420 on Monday. In New York the pound rose to 5U51.4075 dollars from 5U51.39675.