Quiet day in kiwi trading

Press, 7 April 1987, Page 30

Quiet day in kiwi trading

PA Wellington Trade was quiet in the New Zealand dollar yesterday, with the unit little changed at U557.18/25c near the close of trade compared with its U557.21/28C start Over the week-end it was reported that economist Mr Len Bayliss, estimated New Zealand had incurred a huge increase in private overseas debt but dealers said the currency was virtually unaffected by the news.

Most international lenders were well aware of New Zealand’s debt level, and the focus was on private sector borrowing, they said. “Presumably those borrowers have to justify their borrowings through the strength of their balance sheet,” one dealer said.

However, they said the unit was a little nervous upon opening, but it failed to test its lows, and traded between U557.20c and U557.37C during the day. There was very little overseas, corporate, or interbank business in what one dealer described as the quietest day in months.

Opinion about the currency’s future direction was divided. Some dealers believed the unit was too high and could correct to around U556.5c in the near future. The Reserve Bank trade weighted index, which measures the New Zealand dollar against a basket of other currencies, eased to 65.6 at 3 p.m. from 65.8 at 9 a.m. Wholesale cross rites for the New Zealand dollar late yesterday were AustBo.4c, 1.04 Deutsche marks, 35.3 p, 83.51 yen and $HK4.46.

In Sydney, the Australian dollar closed firmer at U571.09/14C on continued offehore capital inflow into domestic share and interest rate markets. But it finished off its U571.20c peak as early Reserve Bank sales and late corporate selling took the edge off gains. The currency opened steady at U570.95/99C. On a trade weighted basis, the Australian dollar was steady at its highest levels since late December with the Reserve Bank index rising to 56.0 from Friday’s 55.9.