Kiwi gaining on $Aust.

Press, 18 February 1989, Page 18

Kiwi gaining on $Aust.

PA Wellington The New Zealand dollar was holding yesterday and continued to gain strength against the Australian dollar in what was a fairly quiet day of trading. It closed at U561.12/22C, with a high of U561.50c after closing at 61.15/25C on Thursday. The New Zealand dollar was well supported about the US6lc mark with good exporter interest, one dealer said. On cross-rates, the New Zealand dollar was 1.228 Deutsche marks, 34.50 p, 76.909 yen, 0.9535 Swiss francs, and Aust73.l7c. “It (sAust.) is not looking a very good currency at the moment and it could go down further,” a dealer said. The volatility of the Australian dollar was causing nervousness among buyers of the New Zealand dollar, another said. The United States dollar weakened slightly yesterday pending the release of its trade deficit figures.

The Reserve Bank tradeweighted index opened at 59.0, slightly up on its closing fix on Thursday of 58.7. It closed yesterday at 59.0. It opened at 58.7 a week ago and 60.2 a month ago. In Sydney yesterday, the Australian dollar slumped in a fresh wave of selling to below USB3c after Thursday’s sell-off, which was sparked by the SAustl.s37 billion trade deficit. The currency fell almost US3c on Thursday to close at 84.86/96c.

. Dealers said trade was nervous on reports of large Australian Reserve Bank sales around USB4c. But there was also support at 83c, which sent the dollar bouncing between 83c and 84c in mostly local trade. By 5 p.m. (Sydney time) the Australian dollar was trading at 83.60/70C, down from its opening of 84.15/20C, but up from its lows of 82.95 c about noon.

Dealers said there was strong buying support around

83c. “But once that buying order is filled I think it will go lower,” one dealer said. “Obviously, the Government and the Reserve Bank want it lower. It is making the market very nervous.” The Australian dollar fell to a two-month low against other currencies on the Reserve Bank’s tradeweighted index to 61.7 points from 63.3 on Thursday. The Australian unit closed at SNZL3S9I/29, compared with 5NZ1.3735/74 on Thursday. In New York on Thursday (early yesterday. New Zealand time), the United States dollar ended modestly lower as nervousness about the United States merchandise trade data neutralised the early buoyancy drawn from the Bundesbank decision to leave its interest rates unchanged. (The Bundesbank is West Germany’s central bank.) “There are jitters in the

market with talk that the trade number is going to be slightly negative,” a dealer said. The December trade figure was likely to set the nearterm trading pattern for the dollar, dealers • said. But estimates for the deficit range from SUSIO billion to SUSI 3 billion. The dollar closed at 1.8380/90 Deutsche, marks, compared- with 1.8405/15 Deutsche marks on Wednesday. It eased to 126.05/10 yen and 1.5600/10 Swiss francs from 126.20/30 yen and 1.5620/25 francs on Wednesday. Morgan Guaranty said the midday dollar was 12.0 per cent below 1980-82 market rates compared with 12.2% below on Wednesday. Concern about a boost in West German interest rates, an obstacle to dollar buying for the last three days, was removed from the market’s focus before United States tradine began,