$NZ falters after overseas checks

Press, 17 August 1985, Page 25

$NZ falters after overseas checks

PA Wellington The New Zealand dollar weakened after trading in a wide range but thinly on the foreign exchange market in Wellington yesterday. Overseas, the American dollar dropped against most European currencies. The New Zealand dollar closed at $U50.5380/00, well down on its $U50.5455/70 opening, but recovered from its low of 53 U.S. cents. Dealers said the kiwi dollar dropped suddenly to its low in the afternoon, but then it found solid buying interest and traded up.

Dealers said there was probably only one sizeable selling order which brought the kiwi dollar down in the afternoon, because the market was so thin.

The currency’s downward trend since hitting a postdevaluation peak of 56 US cents on Tuesday night in London has followed two consecutive nights of it softening overseas. The Reserve Bank tradeweighted exchange-rate index fell to 70.3 points at 3 p.m. yesterday, from 70.7 yesterday morning and on Thursday. At yesterday morning’s level the index, which measures the kiwi

dollar against the currencies of major trading partners, was 12.8 per cent ahead of its level a year ago.

The N.Z. dollar was also worth 76.22 c Australian, 38.02 p, 126.08 yen, and 1.47 marks late in the afternoon. The Australian dollar closed in Wellington at $U50.7020/30, slightly ahead of its SUSO.7OOO/10 opening. In New York the American dollar fell again against all major European currencies overseas on Thursday (early yesterday, N.Z. time), as doubts persisted that the U.S. economy would post a strong second-half performance. Gold was up.

The pound also'gained in New York, breaking through the JUSI.4O mark to $1.4015 from $1.3893 in late trading.

Traders said the address by the South African President, Mr Botha, put upward pressure on gold in late trading. They said his decision to advocate negotiations with blacks, rather than posting reforms in the country’s racial policies, would only lead to more unrest and political instability and would not help end labour problems at gold mines.

In London and Zurich, gold prices rose SUSS to JUS332 in response to the dollar’s decline, which foreign-exchange dealers said was prompted by a surge of dollar selling in Asia before Europe's business day began. In New York on Thursday (local time), the dollar cost 236.80 Japanese yen, down from Wednesday’s 237.85 yen. Other dollar rates in the United States compared with late Wednesday were: 2.7605 West German marks, down from 2.7810; 2.2620 Swiss francs, down from 2.2960; 1.3533 Canadian dollars, down from 1.3563; and 8.4350 French francs, down from 8.5150. The value of the New Zealand dollar yesterday morning, compared with its value immediately before it was floated in March (selling rates as quoted by the Bank of New Zealand) were:

March 1 Aug. 16 JUS 44c 54c Sterling 41.15p 38.55p Canada 61.2c 73.5c France 4.49fr 4.55fr Hong Kong $3.43 $4.20 Japan 114v 127y Nethlds 1.66g 1.67g S’pore 99c $1.18 Switzlnd 1.26fr 1.22fr Germany 1.47Dm 1.49Dm Australia 62.4c 77.2c