Currency report

Press, 14 July 1980, Page 22

Currency report

The United States dollari met widespread selling last; week, according to the! weekly foreign exchange report from the Bank of New South Wales. It lost ground to all major currencies despite substantial central bank intervention in support of; the currency. j I The Federal Reserve [Board’s move to dismantle! l the rest of its March 14 1 credit controls is expected | to lead to lower United (States interest rates. il ; It also signifies concern at I ■ the Federal Reserve about! i the depth of the United ; States recession, which is , likely to be reflected at the i meeting of the Federal Open Market committee. This meeting is widely ex- I pected to lower the floor of . the trading range for over- <

might Federal funds from the (present 8.5 per cent. 1 • Sterling reached its highest level against the United States currency in ; >more than five years, prompted by market sentiment > that United States interest ; rates are headed lower. The Bank (of England intervened Vlose jto its highs of about $2.3850 to stem the. British currency’s rise. I' A strong Government board market is also attracting foreign investors to sterling. I The Canadian dollar (opened substantially stronger against its United States counterpart, aided by news that Canada had a trade surplus of $578 million in May — a stronger performance than was expected in view of the United States recession.