$NZ recovers

Press, 16 June 1988, Page 27

$NZ recovers

PA Wellington The New Zealand dollar recovered yesterday after better-than-expected United States trade data boosted the United States dollar at the open. The kiwi closed at U570.12/21C, against its open at U569.85/95c and Tuesday’s close at U570.26/35C. It traded between U569.55C and U570.30C.

The U.S. dollar jumped to its highest values internationally since late October on the news that the Seasonally adjusted deficit fell to SUS9.9B in April, the lowest in more than three years, from a revised SUSII.7B in March. The U.S. dollar closed at 1.7480/00 marks and 126.30/ 40 yen, virtually unchanged from its open. It traded as high as 126.70 yen. “The trade figures were a hell of a lot. better than anyone expected,” one dealer commented adding that the kiwi immediately slipped against a bullish U.S. dollar.

But remarks by U.S. Federal Reserve chairman, Mr Alan Greenspan, that dollar sales by the Bundesbank were consistent with Group of Seven policies helped push the U.S. dollar down in early trade In Tokyo. Comments locally from Reserve Bank governor designate, Dr Don Brash, that a tight monetary policy must be maintained to keep inflation down helped the kiwi regain US7Oc, the dealer said. On the cross rates, the kiwi

was worth AustB7.B7c, 1.2269 marks, 39.31 p, 88.614 yen, and 1.0271 Swiss francs. The Reserve Bank trade weighted index closed at 68.4, firmer on its open at 68.1 and Tuesday’s closing fix at 68.0. In Sydney the Australian dollar finished off the day’s lows on late short covering but was still well below Tuesday’s close as the United States dollar remained well bid in Aslan trade. The Aussie dollar finished at U579.90/95C, up from a low of U579.65/70C and an opening of U579.80/85C. It closed at U580.33/38C to Sydney on Tuesday. Local dealers said a higher New Zealand dollar provided some support for the Australian currency. The Australian dollar finished lower at $NZ1.1341 from 5NZ1.1413. In New York the UX dollar finished at its highest levels in 7J4 months against the mark, fuelled by a larger-than-expected narrowing in the U.S. trade deficit for April. Dealers cited a growing bullishness toward the U.S. dollar after news that the deficit, on a seasonally adjusted basis, had fallen. The market had expected the April shortfall to range between SUSI2B to SUSI3B. The dollar ended at 1.7485/90 marks and 126.50/60 yen, up from 1.7720/30 and 125.10/15 at Monday’s close. “More and more people are talking about this as being the turnaround of the dollar,” said Mr Charles Spence, of First Interstate