Kiwi near US63

Press, 16 September 1987, Page 36

Kiwi near US63

PA Wellington The New Zealand dollar finished well-bid on the Wellington foreign-exchange market yesterday after setting a record high during a mixed session. Dealers are divided on its future direction.

The kiwi dollar finished at U562.96/02C after rising to a record high of 63.10 against 62.55/62 at the open and 62.60/67 at the close on Monday.' ■ ■'

This compares with the previous post-float high of 62.68 set on September 7 and the March 4, 1985 float of 44.44.

The 42-point jump is the third biggest one day movement the kiwi has made since floating.

“The market came in (opened) short and New York and local corporates attacked it,' one dealer said. Local corporates buying for end-of-month balancing combined with speculative buying and with short covering by exporters to push the bidding higher, dealers said. A lack of sellers, positive domestic market sentiment and a stronger Australian dollar added to the bullishness, they said. The kiwi dollar dipped briefly to 62.70 during the session after the Australian Prime Minister, Mr Bob

Hawke, said he was concerned about the strength of the Australian dollar.

While some dealers said the fact that the kiwi dollar finished well bid indicated it was firm, others said it could be sold off on Wednesday.

"Some people have been saying US65c by Christmas. It seemed far-fetched at the time, but its only two cents away," he said.

The Reserve Bank trade weighted index closed at 71.5, steady against its 9 a.m. fix. In Sydney, the Australian dollar closed easier but off its lows of 72.70, which was reached soon after Mr Hawke’s comments. It opened at 72.90/95 from Monday’s 72.97/02 close.

The local dollar finished at U572.85/90C, off the day’s day’s low ahead of the Federal Budget, dealers said.