Kiwi closes easier

Press, 21 February 1987, Page 24

Kiwi closes easier

PA Wellington The New Zealand dollar closed easier against its opening after a mixed session on the foreign exchange market yesterday. Dealers said high interest rates would underpin trading in the short-term. The * Kiwi finished at 5U50.5485/92 against a JU50.5505/15 opening and 5U50.5488/95 at the close on Thursday. Dealers said the unit slipped to 5U50.5477 after a New Zealand dollar-denomi-nated bond issue in the United States was withdrawn.

“It dented confidence and a couple of corporations exploited it,” one dealer said. The unit quickly found suprort, trading near US55c late/ n the session, dealers said. The trade-weighted index finished at 65.5, down from 65.6 in the morning. On the cross rates, the New Zealand dollar was worth sAustB2.7c„ 1 Deutsche mark, 35.9 p, 84.4 yen, 0.85 Swiss francs and SHK4.2B.

In Sydney the Australian dollar closed easier at JU50.6635/40 from its $U50.6652/57 opening in quiet trading, dealers said. The dollar was down from

Thursday’s close of $U50.6655/60, trading in a narrow range with a high of 5U50.6656/62 before selling orders pushed the unit to its close.

Dealers said the United States dollar was lower on concerns that the Federal Reserve was not prepared to tighten monetary policy to support the dollar and ahead of the Group of Seven meeting would fail to produce a concrete agreement to stabilise exchange rates.

In Paris, it was announced that Finance Ministers of the Group of Seven leading industrial nations would meet “in the Paris region” this Sunday (Monday morning, N.Z. time), sources close to the French Finance Ministry said. France had been working for several weeks to prepare the ground for such a meeting, aimed at bringing greater stability to foreign exchange markets, sources said.

In Washington the United States called on the eve of a meeting of leading industrial nations for economic expansion and international cooperation to calm volatile currency markets. The Treasury Secretary, Mr James Baker, and the

Federal Reserve Board chairman, Mr Paul Volcker, appearing before separate committees of Congress on Thursday, urged greater efforts by West Germany and Japan, two key United States trading partners, to boost domestic growth.

In New York the American dollar rose and then fell in active trading on Thursday (early yesterday, N.Z. time) after confirmation that monetary officials of the leading industrial nations would meet this week-end to discuss ways of stabilising exchange rates. Gold prices were higher. Republic National Bank in New York quoted a bid of 5U5398.40 for a troy ounce of gold, up from $U5392.50 late on Wednesday.