N.Z. dollar rises against $US

Press, 26 May 1984, Page 23

N.Z. dollar rises against $US

PA Auckland The New Zealand dollar rose slightly against the United States dollar yesterday in the wake of the latest crisis undermining confidence in the American banking system. Concern about the ability of American banks to cope with the event of Latin American companies defaulting on loans sent Wall Street tumbling and caused the United States dollar to decline against all major currencies. The sharpest fall was against the Deutschemark, the international speculators’ currency, and New Zealand foreign exchange dealers were today predicting heavy trading in the United States dollar on the Asian market. Mr Garry Wycherley, chief dealer with Aucklandbased Citicorp New Zealand, Ltd, said yesterday the New Zealand dollar would

not rise sharply against the United States dollar unless the United States dollar fell heavily against the Japanese yen, a currency more influential than the Deutschemark on the value of the New Zealand dollar. (The New Zealand dollar exchange rate is set in relation to a basket of foreign currencies weighted in terms of each country’s performance as a trading partner.) “If you see a big move in the yen then the Kiwi dollar will rise,” Mr Wycherley said. “But at the moment a lot of our trading is done with the Aussie dollar and it’s a bit weaker today.” He described the American dollar fall against the Deutschemark as “substantial” and attributed much of the decline to lack of confidence in the ability of countries like Argentina to repay loans to American banks.