Currency report

Press, 27 September 1982, Page 26

Currency report

The previous week's anxiously awaited United States Ml money supply figure proved to be less than most dealers expected — showing an increase of only SUS43OO million, says the Bank of New South Wales in its weekly foreign exchange report. Interest rates remained steady through most of last week, although over the past few days they have drifted lower on growing that despite the recent surge in the growth of Ml, the Federal Reserve is looking to cut the discount rate again soon.

The foreign exchange markets were subdued last week, with the.dollar trading within a relatively narrow range. The dollar's attraction as a refuge currency in times of world political turmoil and economic uncertainty continues to underpin it at the higher levels. There is growing .consensus that the dollar has achieve a new trading range,- and rather than being overvalued, it has merely recovered from years of sustained weakness. The Deutschmark has come under pressure because of political uncertainties in West Germany after the col-

lapse of Schmidt's coalition - government. However, the prospects of a more Rightwing government taking office is generally regarded as bullish for the mark. The yen continues to exhibit considerable weakness, with it trading as high as 265.50 last week. Concern over the Japanese economy was confirmed when Japan’s Prime Minister. Mr Suzuki, iannounced that Japan’s rapidly growing budget de- ■ ficit was reaching alarming proportions and emergency :i, measures were required to curb government spending '