CURRENCY REPORT Very light trading on foreign exchanges

Press, Volume CXIV, Issue 33580, 8 July 1974, Page 16

CURRENCY REPORT Very light trading on foreign exchanges

Trading has been very light on foreign exchanges last week, according to the weekly foreign exchange report from the Bank of New South Wales.

This was partially in re-1 i action to the failure of Bank-i haus Herstatt and rumours? that another German bank; ‘may be in trouble, and also! because of the July 4 holiday; ;in the United States. Dealers are expecting that measures will be adopted by I the appropriate domestic I authorities to control specu- ; lation in foreign exchange by West German and, possibly I Swiss banks. Sterling strengthened early in the week to a peak of about .W52.4040, but eased to close on Thursday at 5U52.3870 —marginally lower than the same time the week before. The pound’s early strength was hard to understand after reserves dropped £B7 million during June—the greatest fall for four months. The influence may have been the news that moderate coal miners had prevailed in a vote, which determined not to claim a further £2O a week. Rumours of a reflationary mini-Budget this week may have helped. The announcement by some major United States banks ;that they have raised their I prime rate to a new record of 12 per cent does not appear to have had a significant effect on present rates. The price of gold continued

its downward slide to close! at SUSI 29 an ounce. High; world interest rates are! blamed for gold’s continuing! drop. The latest Eurodollar offer rates were: one month 14 1/8; per cent; three months; 14 1/16 per cent; six months! 13 15/16 per cent; one year! 12 15/16 per cent. Discount rates for bills. drawn under “form 3” letters of credit were: 30 days 13-1 per cent; 60 and 90 days 13 5/16 per cent; 120 days? 13 5/8 per cent; 150 and 180; days, 13 3/4 per cent.