CURRENCY REPORT Markets quieter but dollar weaker

Press, Volume CXIII, Issue 33254, 18 June 1973, Page 18

CURRENCY REPORT Markets quieter but dollar weaker

Trading on the foreign exchange markets last week appeared generally quiet in absence of the violent fluctuations which have characterised the scene over recent weeks, according to the weekly foreign exchange report of the Bank of New South Wales.

Although dealers reported a slightly nervous undertone, expectations that President Nixon would soon be announcing his anti-inflation moves helped stabilise the dollar.

Spot sterling weakened late in the week on the announcement of the wider £209 million May foreign trade deficit, but most of the loss was quickly recovered. The price of gold moved within the relatively small margin between $115.50 and $117.75 an ounce.

Trading in Italy was reported to be quite hectic,

with the lire spot rate opening at 605-607 and dealing for most of the week taking place in the 620 region. A further heavy deficit in the trade balance, and the increased political uncertainty in Italy both contributed to the weakening.

The German mark is now the strongest currency after having been one of the weaker currencies in the earlier days of the joint float. The mark has been strengthening over the last few weeks, responding to the recent increase in the West German bank rate and the fresh currency tensions that developed after the Watergate affair. The continuing (boom in the West German economy, and the latest trade figures, are also given as reasons for its buoyancy. Eurodollar offer rates were: one month 8| per cent; three months 8 13/16 per cent; six months 8| per cent; one, two, three and five years 8j per cent.