CURRENCY REPORT Sterling and dollar continue to gain

Press, Volume CXV, Issue 33942, 8 September 1975, Page 16

CURRENCY REPORT Sterling and dollar continue to gain

The U.S. dollar generally gained after remarks by New- York Federal Reserve officials that it is still undervalued, says the Bank of New South Wales in its weekly foreign exchange report.

The advance in July of leading U.S. economic indicators also influenced traders. Later in the week, however, there was a moderate decline, partly owing to European nervousness over

the New York City financing situation in respect of the city’s possible default, and also to general profit-taking.

Sterling edged higher, assisted by the apparent rollover of maturing sterling deposits by some oil exporters — mainly in Euro-sterling, and later by news that the British Trade Union Congress effectively endorsed the Government’s pay limitation policy. News that the I.M.F.* intended to sell 25 million ounces of gold to aid developing countries, caused the metal to slide to $148.75. Although it later rallied to $150.25, conditions remain nervous. London dealers estimate there could be surplus gold perhaps for five years. The group of 10 has also abolished the official gold price.

U.S. officials said that Israel and Egypt seem set between them to gain s4ooom to ssooom in aid as a result of interim Middle East peace accord.

Eurocurrency markets absorbed 45 per cent of O.P.E.C. surpluses during the first half of 1975, against 37 per cent average for the whole of 1974.

Japan is to supply special import financing as a step to increase imports of primary products from countries hard hit by a heavy decline in their exports to Japan. Latest Eurocurrency offer rates were:—