Dollar moves up

Press, 19 December 1985, Page 34

Dollar moves up

PA Wellington The New Zealand dollar clawed back above US5Oc on the foreign exchange market yesterday after dropping below US4Bc on Monday.

The currency closed stronger at $U505025/40, compared with its 5U50.4960/80 opening after trading in almost a US2c range.

Dealers said the kiwi finished around the level it was quoted in the United States before the. New Zealand market opened. After the local market initially sold the kiwi down, short-covering and exporter buying quickly pushed it up to US5l5c, where it was well offered. Most of the day it traded

in a range between US5O55c and U550.75C. One dealer said the trading range was the result of two-way business between importers and exporters on a relatively thin market. Another said there was speculative activity, with stop-loss orders by players caught short in the currency pulling it up. . Despite the currency’s slight rebound, many dealers still believed it had more downside potential. The Reserve Bank’s trade-weighted exchange rate index picked up yesterday. It was fixed at 63.9 at 9 a.m. and 63.8 at 3 pan. up from 62.1 on Thursday. The kiwi was also worth Aust74c, 1.26 marks, 35p and 1015 yen late yesterday. There was little change in

other currencies. The United States dollar closed at 25045/60 marks and 20150/65 yen, compared with its opening of 25070/85 marks and 201.80/90 yen. Sterling finished at 5U51.4360/75 from 5U51.4350/65 and the Australian dollar was unchanged at 5U50.6795/02. In New York, the American dollar was mixed against major currencies in light trading as the United States Government reported a widening of the balance of payments deficit and a drop in new home construction. By the end of the trading day, the dollar had climbed to 201.945 yen, but was still below the previous day’s late rate of 20220 yen. The pound fell to $U51.43435 from $U51.43975.