Currency report

Press, 13 September 1982, Page 24

Currency report

The past week has been one of relative stability in the credit and foreign exchange markets, says the Bank of New South W'ales in its weekly foreign exchange report.

U.S. interest rates have fluctuated within a very narrow range, being underpinned by market expectations of a September surge in the money supply which could halt further easing by the Federal Reserve Bank in the near future. Until participants are able to obtain a clearer picture on interest rate trends the market is likely to remain quiet.

By direct contrast, the bullion markets have been extremely active and volatile. Fears of an international

financial crisis have emerged because of the growing number of countries that are unable to meet loan repayments of their huge international debts. With the majority of this owed to the private international banking sector, there are increasing fears of a major bank becoming solvent. The effect this would have on the international finance markets would be disastrous, and this was enough to cause the price of gold to skyrocket. At its peak, gold touched SUSSO2 before falling back to SUS44O on profit taking in New York on Friday. The U.S. dollar has been trading within a relatively narrow range, being underpinned by the higher level of U.S. interest rates.