$NZ still sliding

Press, 30 August 1988, Page 26

$NZ still sliding

PA Wellington International investors bailed out of the New Zealand dollar in early trading yesterday, fearing the kiwi dollar would slip as low as US5Bc, The kiwi dollar closed at U560.50/65c, after opening at 62.15/25, and going to a high of U562.65C. The Friday close was U562.70/80. Stop-loss orders poured in as the offshore panic spread. Some crossbuying saw investors buying into Australian dollars as they sought a more stable currency, dealers said.

With no definite direction and no support levels a “sheep mentality crept into the market,” one dealer said. Sellers were too far away, buyers did not register at all and the Reserve Bank offered no help. Another dealer said exporters should take advantage and should be well ahead of budget if not already covered. A prediction of 60.10 c was the down-

side, but dealers predicted a correction should follow to bring the kiwi dollar up to 63c. Trading was quiet for the United States dollar with the London and Hong Kong markets closed today. On cross rates at the close the kiwi dollar had slid to Aust74.s4c, 1.1290 Deutsche marks, 81.261 yen, 36.0 p, and 95.25 Swiss francs. The Reserve Bank trade-weighted index finished on 61.0, down from its morning fix of 61.9. The close was below the 61.2 low since the kiwi dollar was floated at 44.44 in March, 1985. In Sydney the Australian dollar edged marginally lower to U581.07/12c on booksquaring as attention turned to the beleaguered New Zealand dollar. The Australian currency closed on Friday’s U581.15/20c. Against the kiwi dollar the Australian was sharply higher at $NZ1.3504 from 51.2962.