Currency report

Press, Volume CXV, Issue 33966, 6 October 1975, Page 18

Currency report

The pound sterling, and the United States dollar declined last week in Europe and New York, and sterling’s effective depreciation rate fell to a record low of 29.4 per cent, the Bank of New South Wales says in its weekly foreign exchange report.

In New York sterling weakened on rumous that some Arab oil producers are reducing sterling holdings. Kuwait is believed to have sold sterling, and asked for a cutback in oil payments made in sterling. However. uncertainty about the British economy was the underlying factor contributing to the pound’s decline. The dollar suffered in the backwash of sterling unrest, and as a result of profit taking, and growing market concern over the implications of the fiscal 1976 United States federal deficit of up to SUS9O,OOOm.

The dollar also weakened as European operators concluded that United States economic recovery is faltering.

Gold recovered to SUSI 43 an ounce. Heavy liquidation of stocks is believed now to be over. United Kingdom finance houses have raised the base rate for October to 11 per cent from 10.5 per cent. The Bank of Japan has announced new guidelines which permit Japanese banks to increase their new lending commitments for the fourth quarter of this year by 22 per cent over the same period in 1974. the bank says.