Pound and dollar rise against E.E.C. money

Press, 24 April 1980, Page 19

Pound and dollar rise against E.E.C. money

NZPA-Reuter London The currencies of most European Common Market countries fell against the United States dollar and the pound sterling on Monday, because of belief that the E.E.C. might soon stop receiving Iranian oil.

International investors were concerned that the Western European economy could be disrupted by oil supply problems, currency dealers said.

Britain’s position was strengthened because it is the European community’s major oil producer, and the pound sterling rose sharply on foreign exchange markets. The Bank of England’s index of sterling’s value against major currencies rose 0.68 per cent to 73.6 from 73.1 on Monday. The United States dollar rbse in reaction to the weakness of other currencies, and the growing Western support

for United States moves against Iran, dealers said. Investors believed a cutoff in Iranian oil supplies to the E.E.C. could come either through Iranian reaction to E.E.C. moves or a Community decision to halt imports from Iran. The currency of Japan, whose oil supplies from Iran have already been halted, did not suffer greatly, 7 partly because the United States had promised Japan a sympathetic review of its fuel needs.

Japan has been Iran’s biggest oil customer, and its economy is heavily oil-de-pendent.

The Yen traded at 249.85 per dollar, compared with 250.30 on Monday. Investors were watching the United States economy to see if inflation might be easing, or if the United States might be falling into sharp

recession. The dollar has dropped 5 in recent weeks because of a fall of United States interest rates, but it remains uncertain that rates will continue to fall. . The dollar rose to 1.8590 West German marks (compared with 1.8505 on Mondav), 1.7368 Swiss francs (1.7275) and 4.3245 French francs (4.3025). The pound sterling rose to $2.2390 from $2.2335. It also traded at 4.1600 marks (4.1150) and 9.7000 French francs (9.5700).