$NZ falls

Press, 8 December 1988, Page 26

$NZ falls

PA Wellington The New’ Zealand dollar fell below US65c yesterday on shallow volume and in the face of stronger offshore currencies.

The local currency closed at U564.90/00C from a high of 65.3 and marginally up on its 64.84 low for the day. The Reserve Bank trade weighted index, a measure of the New Zealander dollar worth against the currencies of its major trading partners, slipped to 60.6 from 60.7 on Tuesday and 61.1 a week ago. “Most action was centered on the U.S. dollar today,” a dealer said. “The New Zealand dollar just floundered around with most people expecting it to ease.” The strength of the Australian dollar also undermined the New Zealand dollar, he said. With Australian interest rates creeping up investors were switching currency across the Tasman, he added. If Australian rates continued to rise the local currency outlook would remain bearish, he said. The United States currency had firmed because of a general feeling that

the market was short, dealers said.

An improvement in the New Zealand dollar was not expected before December 14 when the Cabinet meeting would hopefully restore market confidence, they said.

On the cross rates the New Zealand dollar finished at Aust74.2Bc, 1.1327 Deutche marks, 35.02 pence, 79.56 yen, and 0.9479 Swiss francs. In New York on Tuesday the U.S. dollar closed firmer on covering of short positions, which were placed widely last week despite strong U.S. job data for November. The dollar buying was accelerated by talk throughout the financial markets that the Soviet leader, Mikhail Gorbachev, might propose a substantial and unilateral cut in the Soviet conventional troops at his meeting with the United States President, Ronald Reagan, they said. If the U.S. matched the Soviet military force reduction, the United States would be able to reduce the budget deficit, they said. The dollar ended firmer at 1.7368/75 marks from Monday’s 1.7256/61, and at 121.90/95 yen against 121.53/60.