Kiwi high

Press, 24 April 1987, Page 27

Kiwi high

NZPA Wellington In spite of the lower than expected fiscal Budget deficit announced late yesterday, the New Zealand dollar remained high to close at $U50.5821/28. The kiwi had opened firmer at U50.5793/00 and drifted up during the morning to trade around U50.5822/27. Dealers said that the kiwi had drifted down on the expectation that the deficit announcement would be favourable, but strong call rates saw the dollar close higher. There was no doubt that long term interest rates would come down because of the report by the Minister of Finance, Mr Douglas, but there was still nervousness about the fate of short term rates, one dealer said. The Reserve Bank trade weighted index edged up to 66.4 at 3 p.m. from 66.3 at 9 a.m. Wholesale cross rates for the kiwi dollar were AustBl.94c, 1.05 marks, 35.65 p and 82.1 yen. • In Sydney the Australian dollar closed firmer in moderate trading as the recent bearish mood surrounding the currency receded, traders said. Encouraged by a sharp fall in the United States dollar in Asia, the Australian currency closed near its highs at U50.7113/18, after opening firmer at U50.7075/80, from Wednesday’s U50.7068/73 close. Dealers said a bullish mood emerged in. early trading after a lack of overseas selling in trading overnight The Reserve Bank decision not to cut its treasury note rediscount rate and sharp fails in the U.S. dollar had aided the rally. • In Tokyo U.S. trade representative, Mr Clayton Yeutter, said that the yen would rise further in the years ahead unless Japan opened its markets to imports.

He confirmed that he had told the Japan Socialist Party secretary-general, Mr Tsuruo Yamaguchi, earlier that the dollar could fall to 100 yen if Japan kept its markets closed, but emphasised that was a dramatisation and not meant to be taken literally. • In New York the U.S. dollar closed mixed after another day of extremely nervous trading dominated by rumour and speculation about the Federal Reserve’s monetary policy intentions, dealers said. Expectations of faster growth in today’s first-quarter U.S. gross national product report kept the dollar underpinned amid all the uncertainty, but the market did not have enough confidence to push it through resistance at 1.8250 marks. The dollar closed at 1.8230/40 marks compared with 1.8215/25 on Tuesday after trading in a range of 1.8185 to 1.8255 marks. The dollar closed at 142.00/10 yen, down from 142.50/60 on Tuesday. The yen was in demand across the board as United States Government officials and senators kept up pressure on Japan to ease trade tensions by opening up its economy and importing more American goods, dealers said.