Kiwi slips against $US

Press, 12 August 1989, Page 29

Kiwi slips against $US

PA Wellington The New Zealand dollar had another day of quiet trading yesterday, losing slightly more than USO.5c to close at U559.33/43. It finished on Thursday at 59.85/95. The Kiwi lost ground against a firmer United States dollar after revision of the Federal deficit downwards one-third, or SUS 33 billion. Dealers were waiting for the United States producers price index overnight for signs of inflation beyond expectations of an increase around 0.2 per cent. Even without that positive news for the Americans, the kiwi was expected to test lower levels after the completion of most outside buying during the bull sharemarket and fixed interest runs of the last two weeks. Buying support was seen yesterday at the U 559.30 level, dealers said.

The kiwi fell 27 points on the day against the greenback, after trading in a 42-point range between 59.63 and 59.21. The kiwi also fell against the cross rates. It closed at Aust77.B6c, down 19 points, 1.1324 marks down 35 points, 36.69 p down 20 points, 83.150 yen down 21 points, and 0.9776 Swiss francs, down 32 points. The Reserve Bank trade weighted index was 61.3 at 3 p.m., up 0.1 on Thursday. It was 60.4 on Thursday, 60.9 one week ago and 58.9 four weeks ago. In Sydney a stronger U.S. currency kept a lid on the Australian dollar which closed lower in lethargic end of week trade. The Australian unit ended at US76.il/18c, in the middle of its narrow range for the day between 76.05 and 76.36 c, and down from Thursday’s U576.33/40C close.

Although the Australian currency eased" on the higher U.S. unit, one dealer said if the local unit could hold U575.80C, it could rally higher from its current limited range. She said the US dollar was last evening awaiting the release of U.S. producer price index data for further direction. The US dollar finished in Sydney at 1.9175/82 Dm and 140.70/80 yen, climbing from its 1.9060/ 70 Dm and 139.80/90 yen at the New York close. The US dollar gained encouragement from another surge in the Dow Jones industrial average and lower yields at the latest U.S. treasury bond auction, dealers said. They said levels of 1.9250 Dm and 142.00 yen were becoming a real possibility, although they warned recent buoyancy in the U.S. unit was a little overdone on a lack of new economic data. The Commonwealth Bank said the Australian dollar faced downward pressure next week with Tuesday’s Federal Budget and the release of July balance of payments data on Wednesday. The. Australian dollar closed weaker on the Reserve Bank’s trade weighted index at 58.9 points, easing from Thursday’s 59.0 finish. Against other currencies, the Australian dollar rose to 47.07/14p from 46.90/97p previously, to 1.4598/4619 Dm from

1.4439/56, 106.68/86 yen from 106.19/32, $NZ1.2844/78 from $NZ1.2738/71, and 1.2545/ 64 Swiss francs from 1.2458/75. In New York the United States dollar ended firmer on Thursday (early yesterday N.Z. time) after rallying in the afternoon on a combination of factors. They included a wellbid Treasury bond auction and rumours that Friday’s economic data would come in stronger than anticipated. The dollar ended at 1.9060/70 Dm, up exactly a pfennig from Wednesday’s close of 1.8960/70 Dm. The dollar also took out strong resistance levels at 1.9010 Dm and 139.30 yen. Breaching those levels prompted further buying, dealers said. Against the yen, the dollar closed at 139.80/90, compared with 139.05/15 on Wednesday. The Canadian dollar continued its rise to new highs. It ended at sCanl.l7o3/08 per US dollar, after finishing at $U51.1714/19 on Wednesday. In other trading, sterling fell against the dollar, ending at $U51.6170/80 from $U51.6212/22 on Wednesday. The dollar also firmed against the Swiss franc, ending at 1.6395/05, up from 1.6345/55 on Wednesday.