Kiwi still flying: 67c possible today

Press, 9 October 1987, Page 14

Kiwi still flying: 67c possible today

PA Wellington The New Zealand dollar continued to firm yesterday as interest rates rose. The New Zealand dollar eased to close below a new post-float high of U566.85C, reached earlier yesterday in busy trade. Dealers are unsure of the kiwi’s next move, but say it is more likely to reach US67c than drop to US66c in the medium term. The kiwi dollar closed at U560.60/67C against its open of U566.40/47 after what dealers described as a day of good two-way business. The previous high was U566.45C, set on Wednesday and compares with U544.44C when the kiwi dollar was floated in March, 1983. High domestic interest rates continued to attract good off-shore buying sup-

port for the kiwi, dealers said. “Until interest rates come down it is going to be the same old story,” a dealer said, referring to the inexorable climb of the kiwi. A notable feature of the afternoon trade was the buying by a number of local exporters, particularly meat companies, to cover themselves on the December forward market, one dealer said. Only strong Japanese selling, prompted by profit taking, stopped the Kiwi from getting even closer to US67c, dealers said. Cross-rates for the New Zealand dollar were Aust924oc, 1.2156 marks, 40.62 p, 96505 yen, and 1.0142 Swiss francs. The Reserve Bank tradeweighted index eased to 75.6 from its 9 am. fix of 75.8, and still ahead of its Monday open and close of 74.9 and 75.2 respectively. The international depart- *

meats of most of Christchurch’s trading banks are reporting a big demand for overseas currencies — particularly Australian dollars. There is a seasonal factor with New Zealanders getting ready to take their holidays overseas, particularly in Australia. Mr Mike Jones, the Bank of New Zealand’s Christchurch foreign-exchange executive, said there had been "a very high demand for Australian travellers cheques. The volume has been quite abnormal” The head of the international department of the National Bank, Christchurch, Mrs Cathy Sweetman, :said customers were now remitting overseas funds instead of waiting for a few months because of the high New Zealand dollar. Some restrictions had been placed on obtaining Australian cash, because it was difficult to obtain foreign currencies. However, a spokesman for

the ANZ Bank's Christchurch international section said he had not noticed any increase in demand for foreign exchange. According to the Press Association Aucklanders are buying millions of dollars worth of foreign currencies and sending them overseas. AU Auckland banks report a huge increase in sales of American and Australian cash and travellers’ cheques in the last couple of weeks as well as increases in amounts drafted overseas. Two banks have raid they had run out of Australian dollars and were waiting for imports to arrive to fulfil the present customer demand. In Sydney yesterday the Australian dollar finished firmer at U572.42/47C from Wednesday's U572.18/23C, appreciating against a weaker United States dollar. But the Australian dollar was off its early highs of U572.60/65c on technical selling combined with a United States bank forecast the Australian currency was likely to head lower. The dpilar feU to U572.30C, but recovered in the afternoon as the United States dollar again appeared weaker. - In New York on Wednesday (early yesterday, NJZ. time), the American dollar closed lower against major foreign currencies in trading dominated by technical factors. There was little news to affect the dollar while traders await the release next week of the latest United States balance-of-trade figures, said Mr Ronald Holzer, chief foreign exchange dealer at Harris Trust and Company in Chicago. Major United States banks raised their prime lending rates a half percentage point to 9.25 per cent from 8.75 per cent, helping to push the dollar lower in European trading but analysts said it had a minimal effect on the New York foreign exchange market In New York, the dollar feU to 145.19 Japanese yen from 146.84 yen. The British pound rose to JU51.64375 from JU51.6337. Other late dollar rates in New York, compared with late Tuesday, included: 1.82275 marts, down from 1.83285; 1.52125 Swiss francs, down from 15303; and $Can150375 Canadian dollars, unchanged.