$NZ firms in quiet trading

Press, 28 December 1989, Page 18

$NZ firms in quiet trading

PA Wellington The New Zealand dollar yesterday closed little changed from its Friday level with most players still' away on holiday. Dealers expected continued quiet trading at least until the weeks beginning January 8 or Januaty 15 when the major participants return.

“There’s no real corporate market out there,” one dealer said. Others noted reasonable two-way interest, but that was unlikely to be enough to stir the kiwi from a U559.50/85c dollar range for the rest of the week.

“The top’s pretty well-de-fined," another dealer said. Sentiment seemed balanced with many players watching the greenback and Australian dollar for direction. The kiwi closed, at U559.71/78 from a 59.65/75 Friday close. It had traded in a narrow band from 59.63 c to 59.75. The Australian dollar closed in New Zealand at U579.30/37C. The kiwi crossrate was slightly down from Aust7s.4lc Friday’s close to 75.31 c. Other crossrates saw the kiwi at 1.0155 Deutsche marks (1.0279 on Friday), 36.76 pence (37.03), 84.875 yen (85.800) and 0.9242 Swiss francs (0.9277). The trade weighted index was up one point on the day at 60.9. It was 61.1 last Friday, 61.1 one week ago, and 60.9 four weeks ago. In Sydney buying support in a thin market and a weaker United States dollar pushed the Australian currency to a sharply higher finish, of U579.66/73C. Some dealers said the unit would continue to climb in overseas trade, breaching USBOc, with the greenback expected to continue falling. The Australian dollar closed at 78.90/79.10 on Tuesday. “It has had a good run,” one dealer said. “It is showing some strength in its own right, rising against third currencies on the trade weighted index.” Dealers said the unit initially gained strength on the back of a weaker greenback. But buying orders in a thin market, with most investors sidelined until after the New Year public holiday, pushed the unit to a U579.75c high. Against the kiwi the Australian dollar rose to 5NZ1.3308/42 from 1.3154/87.

In New York, the U.S. dollar closed below 1.70 Deutsche marks and 142 yen on Tuesday (early yesterday, N.Z. time), as bearishness stemming from the belief United States credit is on a

softening trend overwhelmed very thin activity. Many market participants were still on holiday, so the price movement was exaggerated and may not necessarily be indicative of a strong trend, dealers said. “(Trading) is so thin it doesn’t make sense to analyse this kind of market,” - said vice president, Natsuo Okada, at the Sumitomo Bank. The dollar ended at 1.6985/95 Deutsche marks and 141.87/92 yen, down from 1.7072/78 and 142.40/50 at Friday’s holiday-shortened session. The Bank of Japan lifted its discount rate to 4.25 per cent , on Monday, when US markets were closed for the Christmas holiday, but the move had been widely expected.