CURRENCY REPORT Dollar eases against major currencies

Press, Volume CXVI, Issue 34048, 12 January 1976, Page 11

CURRENCY REPORT Dollar eases against major currencies

After quiet trading in a thin market over the holiday period, the dollar weakened consistently against all major currencies, says the Bank of New South Wales in its weekly foreign exchange report.

In spite of considerable : support from the Swiss [National Bank, the dollar retreated in the wake of a sharp advance of the Swiss franc. West Germany’s substantial trade surplus for November, and expectation of further easing in United States monetary policy. Leading central banks continued to act to counter the U.S. unit’s weakness, but declining short-term U.S. and Eurodollar interest rates, and some speculation in Europe that the U.S. may shortly cut its discount rate from the current 6 per cent, resulted in further losses for the dollar. The Swiss franc is said to have been buoyed by speculative demand for the currency based on Switzerland’s low inflation rate, and news that the National Bank set the 1976 money expansion at an unchanged 6 per cent. Sterling strengthened over the period. This week’s I.M.F. meeting’ in Jamaica to implement new gold reform measures is making some investors nervous’ about holding gold. The metal! closed at 5U5138.87.

The reserves of the United Kingdom fell in December, for the fifth month in succession. They now stand at SUSS492m. and are the lowest since October 1971. The Mauritian Government has linked the rupee with S.D.R.’s instead of sterling.