$NZ jumps to 55c

Press, 1 July 1986, Page 24

$NZ jumps to 55c

Mr Robert Challinor has been appointed a director and the chairman of Broadbank Corporation Ltd. He was previously a partner in the accounting firm Deloitte Haskins and Sells.

PA Wellington The New Zealand dollar closed 1 U.S. cent stronger at 55 U.S. cents on the Wellington foreign exchange market' yesterday, leaving brokers unsure of the reason for the sharp rise.

The N.Z. dollar firmed because of a slightly more aggressive Government funding programme (announced on Friday) than had been previously anticipated, according to one dealer.

“They’re going for fairly large amounts in the short term,” he said.

But another said the unit had been driven up initially on exporter demand. People then began short covering, which in turn triggered a series of stop-loss orders. (A stoploss order is when, say, a corporate buyer in the market has a need for kiwi dollars but delays buying in the hope of getting the best deal. With a pre-determined upper level in mind, the corporate buyer buys at this level when there seems no immediate prospect of a fall, thereby cutting his losses).

The kiwi dollar closed at $U50.5500/10, against its $U50.5400/15 opening.

The currency had also appreciated against the Australian dollar. Yesterday afternoon it was worth 81.35 Australian cents, compared with 80.35 on Friday.

.The immediate outlook was unclear for the kiwi dollar, and much will depend on the U.S. dollar overseas in Monday trading (early today, N.Z. time).

The trade-weighted Reserve Bank exchange rate index was at 66.0, compared with 65.0 on Friday and 62.7 before the float It. was worth 1.20 Deutschemarks, 35.9 p, and 90.35 yen. In Sydney, the. Australian dollar ended the financial year on a firmer note yesterday. at $U50.6766/73 from its $U50.6735/42 opening, on book squaring and the softer U.S. currency. The key move in the local dollar came in thin lunchtime trading which saw the dollar climb to $U50.6770 from its midsession 5U50.6730/37, before meeting chart selling resistance at the top.