Interest rates prop kiwi

Press, 13 December 1986, Page 29

Interest rates prop kiwi

PA Wellington The New Zealand dollar shot up to a high of $U50.5122 today before being pushed back by profit-taking and overseas selling, foreign exchange dealers said. The unit opened at 0.5066/73 and climbed quickly on the back of overnight offshore enthusiasm for the currency, first seen in Asia, and then in London and New York. Busy interbank trade carried the local unit up initially, and corporate stop-loss orders triggered around the 0.5090 level pushed it up to the high for the day, dealers said. “It could have gone higher easily but then the Far East came in and sold it back down,” one dealer said. Other dealers said importers selling the kiwi dollar to coyer their trading needs, plus bank and corporate profit taking had also put a lid on the unit’s rise. The kiwi drifted back to be traded around US5Oc for most of the afternoon, and stood at 0.5105/12 near the close of trade. Dealers said that yesterday’s Government stock tender, which saw interest rates for benchmark five-year stock rise 1.06 per cent on the last tender to an average of 17.45 per cent, had supported the currency. The Reserve Bank trade-weighted index was fixed at 62.4 at 9am and 3pm.

The value of the New Zealand dollar yesterday

morning, BNZ sell rates, compared with its value immediately before it was floated in March last year, was:

1.02DM Aust 62.4 c 77.0 c The Australian dollar closed firm in Sydney at $U50.6587/92 in light trading volume with little impetus to push the currency through 0.6600. The close leaves the dollar at near its fivemonth closing highs of 0.6585/95 reached on Thursday. Traders said there was little commercial or interbank interest after the currency’s sharp gains on the back of November balance of pay-, ments data. Light nervous selling took the dollar to a low of 0.6567 but it recovered in afternoon trading. In New York the US dollar closed firmer against most currencies in quiet trading. It opened higher in line with improvements in Europe and received an additional boost at the opening on news of a 0.9 per cent rise in the nonauto component of U.S. Retail sales in November, dealers said. With cars, sales were up 0.5 per cent.

Pre-float Y’day Mar 1 Dec 12, 1985 1986 US 44c 50.5c Sterling 41.15p 35.4p Canada 61.2c 69.8c France 4.49Ffr 3.33Ffr HK $3.43 $3.93 Japan 114yen 82yen N’lands 1.66g 1.15g S’pore 99c $1.11 Switz 1.26Sfr 0.85Sfr Germany 1.47DM