N.Z. dollar reaches a post-float high

Press, 10 July 1987, Page 12

N.Z. dollar reaches a post-float high

PA Wellington The New Zealand dollar ended just below US6Oc yesterday after reaching a post-float high in the morning session. Although it looked slightly nervous, good support at about U559.80c should steady the kiwi at its new levels, dealers said. After opening at U 559.75 the kiwi climbed quickly to 60.05 and settled at 59.93/00 at the close. The influences that brought the kiwi up were a more confident Australian dollar, good local exporter support, and a well-bid $5O million Eurokiwi bond issued overnight in the United States, dealers said.

Although, some dealers believed the kiwi would continue firming, others said that with only 36 days until the General Election more volatility could be expected.

The previous high of U 559.80 was set on June 18. The kiwi floated at U544.44C on March 15, 1985. The Reserve Bank trade weighted index was unchanged for the day at 69.0 after Wednesday’s close of 68.6. Cross rates for the New Zealand dollar were AustB4.33c, 1.1004 Deutsche marks, 36.99 p, 89.615 yen and 0.9176 Swiss francs. In Sydney, the Australian dollar ended firmer on a return of overseas investor support in the wake of Wednesday’s volatile trading, dealers said. The currency closed at U570.90/95, up from Wednesday’s 70.65/75C local finish and New York’s 70.57/62. The dollar traded over a 71.25 c to 70.80 range after opening at 71.10/15c. Traders said the dollar rose to its day’s high on early overseas buying and

it was well bid at 71.00 through brokers, with traders suspecting light Reserve Bank support. But the market remained very nervous ahead of the Federal election. Traders said the market was subdued, with an absence of selling from Asian sources evident in recent days. They said the firmer tone reflected the psychological success of the central bank’s confirmation of intervention since the start of the week. In New York the American dollar closed mixed against big foreign currencies in uneventful trading early yesterday morning (NZT) but held on to fresh gains against the Japanese yen. Mr Ron Sapiro, the head trader at Chicago Illinois National Bank and Trust Company, Chicago, said that the dollar "hasn’t broken any major chart points. We’re still in

a trading range, it’s just now at the high part rather than the low part,” The dollar closed in Tokyo at 150.25 yen, up from 149.45 on Tuesday. It was the dollar’s highest close in Tokyo since March 23, when it traded at 150.73 yen. In London, the US dollar ended mainly firmer and well above the psychologically important 150 yen level, after early gains led by an advance against the yen. Dealers said trading was largely technical and likely to remain so this week. The U.S. currency ended nearly one yen higher at 150.55/65 yen after opening at 150.33/ 43. It breached the 150 yen barrier overnight in New York and Tokyo on expectations of a switch of Japanese funds from yen to dollar investments. Japanese stock and bond prices have been falling steadily in recent weeks.