SENSATIONAL FALL

Ashburton Guardian, Volume 53, Issue 13, 26 October 1932, Page 5

SENSATIONAL FALL

VALUE OF THE STERLING. BASED ON UNFOUNDED RUMOUR EXCHANGE ON AMERICA. (United Press Association— Copyright) (Received This Day, 9.30 a.m.) LONDON, October 25. A further sensational fall in sterling is ascribed by the "Standard" to the recall of French funds for the impending State loans, also to "bear" attacks in - Paris and Amsterdam, based on unfounded rumours that the Exchange Equalisation Fund is exhausted and that Britain is short of dollars for Decomber repayments. The "Standard" hints that the Treasury Bank will shortly intervene, with disastrous results to speculators.

LOW RATES IN NEW YORK.

(Received This Day, 12.10 p.m.) NEW YORK, October 25. A new 1932 low level was touched by* the sterling on foreign exchanges yesterday, the pound closing one and three-quarters lower at 330* for cables, rallying from an opening of 3295. It was believed that official support had been withdrawn again since the decline of the sterling last Tuesday, when currency was stabilised close to the 340 level. Bankers here said that British support would come again when the sterling reached a level that could be supported with greater ease, but no indication of that level was forthcoming. The Canadian dollar closed one cent lower at 91£ cents, after opening at 92.

SEASONAL INFLUENCES.

THE EQUALISATION FUND

(Received This Day, 12.35 p.m.) LONDON, October 25

After a further decline to 3.28 dollars, sterling on New York recovered to-day to 3.30*. The low price of the pound is attributed in city circles here to influences of a seasonal character, which naturally are more marked since departure from the gold standard, accelerated by selling by foreign* speculators whose operations are considered to be attended by a considerable measure of risk to themselves. On the London Stock Exchange today a feature at the close wjas the sharp recovery in leading British Government stocks, especially war loan, assented at 102.

Answering, in the House of Commons, a question as to whether speculation attacks on the sterling had been checked by the exchange equalisation account, the Chancellor of the Exchequer (Mr Neville Chamberlain) replied that he was unable to say to what extent, speculation in. exchange existed, but he had no doubt that reserves of foreign currency in this account acted as a deterrent against the activity of speculators. The purpose of the account was to prevent excessive fluctuation in the value of the currency, and it was never intended to keep exchange at a fixed price or to keep it within a fixed range of values in opposition, to seasonal or other tendencies.—British Official Wireless.