Kiwi firms to US47c

Press, 12 September 1986, Page 10

Kiwi firms to US47c

PA Wellington The New Zealand dollar closed stronger at $U50.4765/ 75 against its $U50.4685/95 opening yesterday on the foreign exchange market in Wellington. Dealers said trading in the kiwi was volatile in the morning after it eased early on in line with the softer Australian dollar, reacting to Moody’s downgrading of Australia credit rating to AAI from AAA. The kiwi slipped to 5U50.4660/70 before bouncing back up quickly. Some dealers said the higher than expected rise in the August food price index signalled higher inflation even before GST is introduced, and possibly higher interest rates and kiwi. But others saw the food index figure, if anything, as bearish for the unit. The Reserve Bank's tradeweighted exchange rate index rose to 58.4 at 3 p.m., from 58 at 9 a.m. and its all-time low of 57.8 at 3 p.m. on Wednesday. Other values for the kiwi at close were Aust77.2c, 0.984 Dutsche marks, 32.2 p, 73.81 yen and 0.7987 Swiss francs. The Australian dollar recovered and closed in Wellington at $U50.6153/60, against its $U50.6090/97 local opening. The U.S. dollar closed steady at 2.0630/40DM, but higher at 155.10/20 yen against its 154.60/70 start. Sterling finished slightly lower at JU51.4790/00 from 1.4815/25. In Sydney, the Australian dollar closed sharply higher

in a postive response to bet-ter-than-expecied August balance of payments data. It closed at $U50.6170/78, the highest since August 19, ■ after a day of volatile trading. It opened lower at $U50.6067/74 from Wednesday’s local close of SUSO.6IIB/25 after the downgrading of Australia’s long term credit rating to AA-1 from AAA by Moody’s Investors Services. The dollar closed mostly firmer on the cross rates at 95.85 yen from 95.18, 1.0353 Swiss francs from 1.0289 and 1.2742DM marks from 1.2636. It eased to 0.4170 p from 0.4230 and 5NZ1.2836 from 1.2949. The Reserve Bank’s trade weighted index rose to 50.9 from 50.6. Traders believe the Australian dollar, having broken through key chart levels at 5U50.6150 and $U50.6170 could now go on to test 5U50.6240 — the next resistance point. In New York, the U.S. dollar tested the higher and lower levels of its recent, narrow trading range on Wednesday (early yesterday N.Z. time) but ended the day little changed from the previous session. Trading was very active. The dollar ended at 2.06345DM down from 2.06665; 154.685 Japanese yen, down from 155.60; 1.Q745 Swiss francs, down from 1.6810; 1.38525 Canadian dollars, up from 1.3812; 6.7450 French francs, down from 6.7475; and 1,423 Italian lire, down from 1,425. The British pound rose to 5U51.4816 from 1.4765.