Currency report

Press, 2 March 1981, Page 20

Currency report

The United States dollar elssed firm after another week of wide find nervous fluctuations which finally left the U.S. currency generally showing; mddest on-bal-anc® gains, according to the Weekly fdfeign exchange report from the Bank of New South Wales. Continuing confidence in the Reigan administration’s economic policy direction and concern over the vulnerability of European Currencies to events in Poland and to domestic economic prospects — particularly Ifl West Germany, were the principal factors underpinning the dollar. The Bundesbank, among Other actions, suspended the Loftibard facility and created a Special Lombard with A variable rate, add the Swiss National Bank raised it® r-i t

bank rate a half point to 4 per cent, and its Lombard tai® 1 ppiht to: 6.5 per cent Th® Bundesbank president (Mr Poehl) said that th® west German measures meant tighter- credit and would - push money market rates higher. As 4 result of the Bundesbank actiofts, Euromark rates Were up about 1 point td 10.5 -per cent after haVifig bden above 11 per cent at on® stage. Sterling fell sharply last week agmnet the dollar and continental ' currencies on continuing speculation that the United Kingdom budget on March 10 will include a substantial cut id minimum lending rat®. The market has already diScOuiit&i a 2 p®f cent Cut iri M.L.R. but some operators are now speculating On a reduction of three or mOf® perefentage points. _