Late check to SNZ

Press, 9 January 1986, Page 18

Late check to SNZ

PA Wellington The New Zealand dollar settled at US5l.Bc throughout most of yesterday’s trading on the foreign exchange market in Wellington before panic selling took it down'to 51.4 U.S. cents minutes before close. The day’s mostly directionless trading came after an abrupt about-face from a bear trend to a bull trend early this week. The kiwi dollar closed at $U50.5135/50 from its SUSO3IBO/00 opening, but the trade-weighted Reserve Bank index failed to budge from 65.2 all day. A dealer said the market was still “running scared” after intense exporter buying interest took the unit up by about 2.5 U.S. cents in the 48 hours from Monday’s opening. The present weakness of the U.S. dollar was providing buoyancy for the smaller currencies such as the kiwi and the Australian dollars. Others were not so sure if the kiwi's relationship with the US dollar was so strong. “It’s the supply and demand factors that are more relevant to the kiwi, but a fall in the US dollar would provide some underlying support,” one dealer said. Another was more definite: “It (the US dollar) has no effect on the kiwi at all.” He predicted the kiwi would trade in a USlc range from 0.5150 US dollars from now till the end of the week. In overseas trading early yesterday morning (N.Z. time), the U.S. dollar closed firmer as it paused to catch its breath after the hectic trading and sharp movements of the last few sessions. But the currency remained in a virtual tug-of-war between sellers and buyers, both sides hunting for clues on the dollar’s likely direction. It kept to a narrow range as many awaited the United States December employment report. “The data may indicate the timing of a discount rate cut," a trader said. The dollar closed in the Northern Hemisphere at 2.4420/35 marks, up slightly from the previous day’s close of 2.4350/65 marks.