N.Z. dollar jumps as U.S. declines

Press, 28 January 1986, Page 22

N.Z. dollar jumps as U.S. declines

PA Wellington The New Zealand dollar climbed sharply on the foreign exchange market yesterday, continuing the upward momentum gained from the United States dollar’s latest slump.

The kiwi opened at $U50.5255/70 and closed at $U50.5330/45, after being sold as high as $U50.5360. The kiwi appreciated 4.5 per cent against the United States dollar since its Friday opening, while most other currencies rose 2 per cent against the SUS.

Dealers listed several factors behind the kiwi’s rise, in addition to the United States dollar’s fall on Friday after the Japanese Finance Minister, Mr

Noboru Takeshita, indicated that his Government would accept a rise in the yen to 190 a dollar if it reflected the market forces.

New Zealand foreign exchange dealers were looking to the export season to provide plenty of kiwi buying interest from the commercial sector in coming weeks.

Domestic interest rates firmed slightly yesterday and the SIOOM Treasury bill tender announced yesterday was bigger than expected. There were also some big Euroklwi issues to come — two SSOM drawdowns, understood to be scheduled for late February.

The United States dollar and sterling both opened

weak in thin and nervous Asian trading, Hong Kong dealers said.

Short-covering helped the dollar to recover to 195.80/90 yen after it opened at a seven-year low of 195.10 in Tokyo against New York’s Friday finish of 196.90/ 197.05. Sterling fell to 271.70 yen from last week’s finish of 280.00 in the East. The Reserve Bank’s trade-weighted exchange rate index rose to 66.4 at 3 p.m. from 65.4 at 9 a.m. and 64.6 on Friday.

The kiwi was also worth Aust74.9c, 1.28 marks, 38.4 p and 104.6 yen in late trading. The United States dollar closed easier at 2.4015/25 marks, against its 2.4060/ 10 local opening.