$NZ climbs back to 50

Press, 10 January 1986, Page 9

$NZ climbs back to 50

PA Wellington The New Zealand dollar made a minor recovery on the foreign exchange market in Wellington yesterday after being sold down 1.4 U.S. cents overnight. It firmed to $U50.5050/70 from its $U50.4990/20 opening, amid rumour that there had been Japanese disinvestment in Government stock outside New Zealand’s time zone. While some dealers stuck to the rumour this after-

noon, others discounted it outright. One dealer said the Japanese had held off executing the rest of their estimated SIOOM to ?150M selling order yesterday, giving the local unit potential for a short term recovery. But another said this was “a load of rubbish”. “What really happened was that there were people out there with long kiwi dollar positions. When they dumped them, that (trend)

carried on through into Lon- < don,” he said. , The selling pressure was purely New Zeland-based. This view was supported by another dealer, who said he had seen no evidence of offshore disinvestment. , The trade-weighted Reserve j Bank exchange rate index rose , to 63.0 at 3 p.m. compared with 62.7 in morning. ; On the cross-rates, the kiwi ; dollar was worth 73.4 Australian cents, 1.24 marks, 35.1 p and 102.5 yen. The U.S. dollar closed sharply higher on Wednesday

(early yesterday, N.Z. time). Better-than-expected U.S. December employment data dashed the bond and stock markets’ hopes for a discount rate drop, dealers said. Citing the employment report, Salomon Brothers’ chief economist, Mr Henry Kaufman, said the Federal Reserve Board would not cut the discount rate, reversing his early December forecast. U.S. interest rates rose and bolstered the dollar. ‘The bond bulls were slaughtered today, 1 a trader said.