Firm $NZ closes easier

Press, 12 June 1986, Page 24

Firm $NZ closes easier

PA Wellington The New Zealand dollar closed easier at $U50.5625/35 yesterday compared with its opening of $U50.5650/65 on the N.Z. foreign exchange market. But dealers said the kiwi was looking reasonably firm in afternoon trading, with light to moderate exporter covering and some offshore buying interest, after coming under selling pressure earlier in the day. The kiwi drifted back during the morning under the influence of surplus liquidity and easing interest rates. By mid-morning the kiwi was at $U50.5615/30. Dealers said the local unit had risen overnight on buying demand in New York and London for N.Z. dollar denominated bonds and was underpinned by a softer U.S. dollar.

One dealer estimated some $2OO million and S3OOM in euro-kiwi and yankee-kiwi drawdowns were expected in the next week or two.

The Reserve Bank’s tradeweighted exchange rate index fell to 67.4 at 3 p.m. from 67.7 at 9 a.m. and 3 p.m. on Tuesday.

Cross rates for the kiwi in late trading were AustBl.l9c, 1.25 marks, 36.92 pence, 94.1 yen and 1.028 Swiss francs.

The U.S. dollar closed lower in N.Z. at 2.2150/65 marks from its opening of 2.2175/90, but steady at 167.05/20 yen. Sterling closed slightly firmer at $U51.5210/18 from $U51.5200/10. The Australian dollar closed unchanged at $U50.6930/37. The dollar ended at 2.2210/ 20 marks, below 2.2470/80 at the previous close, but above the low for the day at 2.2125

marks. Sterling closed higher at SUSI.SIBO/90. In Australia, financial markets reacted adversely to Mr Hawke’s address to the nation, with the Australian dollar falling 50 basis points, dealers said. It fell to a SUSO.6BBO low soon after news of the statement reached the markets after trading most of the afternoon around $U50.6950 from its opening of $U50.6935/42 and Tuesday’s close of $U50.6912/19. A foreign exchange dealer with a main trading bank said the market’s negative mood was based on a belief the Prime Minister had said nothing to win market confidence.

In New York, the dollar closed lower early yesterday (N.Z. time), but above the day’s weakest levels with the improvement in late afternoon attributed to reports

that the Federal Reserve had again bought dollars at the request of Japanese monetary authorities. Dealers said that the Fed bought dollars when it slipped to 166.50 yen and again in the afternoon at 167 yen. U.S. traders said nearly SUSIOOM may have been spent to gain only 20 to 30 basis points. The dollar ended at 167.30/40 yen against 168.40/50. The pound had previously closed at $U51.4975/85. And in Mexico City the peso recovered sharply against the dollar as speculation about the country’s economic future abated.

Private exchange houses quoted the peso at between 635 and 640 to the US dollar