CURRENCY REPORT

Press, Volume CXVI, Issue 34097, 8 March 1976, Page 20

CURRENCY REPORT

After a brief period of optimism because of a vote of confidence in President Moro's Government bv the Italian Senate the lira experienced widespread losses on the reopening of Italian foreign exchange markets, says the Bank of New South Wales in its weekly foreign exchange report Tire Bank of Italy carried out little or no control over its currency, and markets were uncertain over its intervention stance. It was considered that the hank's invery ent ion capacity could be limited by the need to maintain foreign reserves. Trading in the United States dollar was characterised by volatile exchange shifts; as evidence grew that short term United States interest rates yvere starting to move upwards as the American economy recovers Ihe dollar moved higher, to fall back later when markets felt they had overreacted to the interest rate developments—reflecting the opinion of s<sme German market operators that the dollar is overvalued Easier Eurodollar rates also exerted downward pressures on the United States unit. Currency trading became apprehensive m some centres in response tn the fresh South African political tensions raised by the Mnzambiqu* President's call for a state of war with Rhodesia Gold closed at $132.40.