Kiwi still climbing

Press, 7 January 1987, Page 27

Kiwi still climbing

PA Wellington Bullish sentiment pushed the New Zealand dollar higher in quiet trading on the Wellington foreign-exchange market yesterday. Dealers said trading was dull; yesterday no fresh factors influenced the market either way. The currency closed at JU50.5368/75 from its 5U50.5334/41 start and JU50.5323/30 finish on Monday.

“It’s the same old scenario ... high interest rates, bullish sentiment and exporters,” one dealer said.

Some dealers said they expect the unit to consolidate today while others said it would drift higher. "There are not many buyers or sellers ... there is not a lot on either side,” another dealer added.

The trade-weighted Reserve Bank exchange rate index was fixed at 64.4 by 3pm, up from 64.2 in the morning. In Sydney yesterday, the Australian dollar finished sharply lower in heavy corporate and interbank selling at $U50.6620/25.

After holding near its opening levels of 5U50.6995/0.6700 for most of the day, an estimated S2OOM corporate or investment trust order triggered selling in late trading. It closed in Sydney on Monday at 5U50.6686/93.

In New York on Monday (early yesterday N.Z. time), the U.S. closed higher after the Bundesbank’s sudden intervention on behalf of the currency earlier in the day in Europe.

Dealers said the West German central bank’s dollar purchases were modest. But because the action took the market by surprise, many participants bought back dollars they sold recently and the unit rose more than a pfennig in minutes.

Still, sentiment remained bearish for the dollar amid

expectations of continued tepid U.S. economic growth.

The dollar closed at 1.9300/10 Deutsche marks, up from 1.9230/40DM at Friday’s finish and from 1.9220/30DM at the Monday opening. Forecasts by a number of economists that the American economy will get off to a slow start this year have kept the dollar on the defensive for weeks.

America's poor trade picture, as shown by November’s record trade gap of JUSI9.2 billion, buffeted the dollar last week and sparked a strong rally in the foreign currency futures trading pits in Chicago.

The U.S. dollar ended 1.6275/90 Swiss francs, up from 1.6140/55 at Friday’s abbreviated finish, and at 159.25/35 yen, up from 158.45/55.

Sterling slipped slightly on the heels of lower crude oil prices. Spot prices for Brent crude declined along with spot and futures prices, for U.S. crude. Analysts said the pound’s weakness also re- 1 fleeted the mark’s gains earlier in the day against many of the European currencies. Sterling fell to SUSI. 4705/15 from SUSL4BBO/90 at Friday’s close.