Kiwi ready to test highs?

Press, 23 January 1988, Page 29

Kiwi ready to test highs?

PA Wellington The New Zealand dollar closed firm yesterday after thin trade and dealers predicted that it might be ready to test its post float highs early next week. The kiwi closed at U566.75/84C, against its opening at 66.25735 c and Thursday’s close at U566.40/50C. Its traded high yesterday was 66.72 c and its lbw was 66.22. Dealers said the kiwi had attracted some "aggressive quoting” though the trade had been thin and speculative. It had traded between

66.20 c and 66.60. One dealer said that several traders had been caught out by its staying power at these levels. “I wouldn’t be surprised if it broke through 67.05 c next week,” he said. The U.S. dollar was sluggish and dealers said it seemed to have found upside barriers around 1.6790 marks and 126.50 yen, which were the points where the Central Banks would intervene. Dealers said markets were still cynical about the long-term significance of the improvement seen last week in the U.S. trade data.

They said comments by U.S. Trade representative Clayton Yeutter this week in Tokyo that he did not see any major drop in the U.S. trade deficit until the second half of 1988 and into 1989 also discouraged trade. In new York on Thursday the dollar closed at 1.6640/50 marks and 127.15/25 yen, up from 1.6565/75 and 127.10/20 at Wednesday’s close. However, in London it closed higher against the mark, at 1.6635/45, but lower against the yen at 127.35/ 45. On the cross rates the kiwi was worth

Aust93.o2c, 1.1082 marks, 37.12 pence, 84;818 yen and 0.8991 Swiss francs. The Reserve Bank traded weighted index closed at 66.5, slightly up on its morning opening of 66.4. Meanwhile, in Sydney, the Australian dollar closed marginally higher at U571.50/55C in quiet week-end trading amid continued nervousness on the U.S. dollar’s outlook. The unit was up from its close on Thursday at U571,35/40 The Australian dollar finished higher on the Reserve Bank’s trade weighted index at 52.6