Bare move in kiwi dollar

Press, 12 February 1986, Page 43

Bare move in kiwi dollar

PA Wellington The New Zealand dollar closed barely changed on the foreign exchange market in Wellington at 5U50.5420/35 against its 5U50.5415/30 start, after busy trading in a wide range. Dealers said that after selling down early to U553.90C on a selling order out of the United States, the local unit was bid up in Australia and locally on strong exporter demand and short covering. It traded up to US55c — its highest level since mid-December. But at that point it triggered offshore loan coverings and also came down on importer covering and profit-taking to finish just above its local opening. “It was easily the busiest day of the year so far,” said one trading bank dealer of the local currency.

“There was plenty of two-way business, with people not willing to hold positions for a long time — just straight in and straight out.”

This afternoon’s downwards correction in the kiwi dollar was expected after recent gains, but dealers said high interest rates and exporter needs still underpinned the currency. The Reserve Bank’s trade-weighted exchange rate index was at 67.3 at both 9 a.m. and 3 p.m., up from 67.0 on Monday afternoon. The index stood at 62.7 before the New Zealand dollar was floated last March. Other wholesale values for the kiwi dollar in late trading were Aust7B.6c, 1.29 marks, 38.4 p and 101.7 yen. Dealers said there was little activity in the major currencies today after the' New York exchange closed — with Singapore, Hong Kong and Tokyo exchanges on holiday. The United States dollar closed easier at 2.3775/90 marks from a 2.3800/15 local start and more than 2 pfennigs down on its previous close. The weak United States dollar also recorded a new seven-year low against the yen, finishing at 187.28/38 yen after starting at 187.45/60. Sterling, despite oil prices still falling, finished slightly firmer at $U51.4090/05 from its 5U51.4065/75 local start. On Monday the dollar closed sharply lower as the yen led yet another charge against the United States currency. The dollar opened and stayed below the psychological 190 yen level in New York, adding momentum to a move that had begun earlier in thin Tokyo market dealings, analysts said. ‘There is a widespread feeling that Japan would view a 185 dollar-yen rate as acceptable. The market sometimes trades as much on perception as it does on fundamental and technical factors,' said one dealer. The dollar fell to a seven-year low of 187.30/ 40 yen at the close from Friday’s finish of 190.55/ 65.