THE FUTURE OF STERLING.

Auckland Star, Volume LVI, Issue 232, 1 October 1925, Page 4

THE FUTURE OF STERLING.

AN AMERICAN VIEW. According to "Commerce Monthly," a New York banking journal, there is little likelihood of any substantial change in the exchange rate of sterling compared with the dollar in the near future. The position as on August 15 is summed up as follows:—

Sterling declined somewhat in a dull market during the latter part of July as a result of the threatened strike ot the British coal miners. Tho temporary adjustment of the dispute removed this source of pressure. The lowering ot the discount rate of the Bank of England from 5 per cent to -_ per cent on August G resulted in a temporary decline, but recovery was prompt and it closed on August lo at 485 13-16 dollars. Cotton and grain bills will begin to make their appearance in increasing amounts about September 1, but better crops in Europe seem likely to lessen the offerings of grain bills thi a season. The gold holdings of the Bank of England have increased approximately 41,000,000 dollars since the re-establish-ment of the gold standard in Great liritain on April 28, being now larger i ban at the outbreak of the World War. Tho size of the gold holdings, coupled with the fact that the London money rate is still higher than tho New York rate, justifies the expectation that the autumn movement of exports from North America will result in only moderate fluctuations of the pound.