Currency report

Press, 25 June 1979, Page 12

Currency report

The United States dollar. continued to ease under re-; newed selling pressure, par-1 ixnlarly from Eastern bloc I countries, coinciding with a 1 general bearish reassessment 1 of the U.S. currency’s outlook, according to the weekly foreign exchange report from 'he Sank of New; I Si.uth Wales. The dollar was undertn.ned by the inflationary potential of last week’s re-. port of a record $6.9 billion: rise in the U.S. money sup-i ply and o f the news of a 1.3 I per cent increase in U.S. I industrial production in May after a 1.4 ner cent decline in April. The move to an I 11.5 per cent prime rate,: from 11.75 per cent, by seme major U.S. banks also heiped to overshadow the jcfr-l'ar Sterling strengthened toj its highest level against the dollar since August, 1975, on hrivv commercial interest, particularly from Germany i and Switzerland. It was also heiped by foreign demand for British Government j bonds, high U.K. interest rates, and lower than ex- | pected trade deficit figures ■ for Mav. The Canadian dollar closed 11. v.-et last week after the news that the Arab mone- | -arv fund had stopped al! I dealings with Canada because of Ottawas’s decision to move the Canadian emI bass" in Israel to Jerusalem, 'from Tel Aviv.