Sterling falls to new low against SUS

Press, 2 May 1984, Page 29

Sterling falls to new low against SUS

PA New York The U.S. dollar staged a broad advance in light trading on world currency exchanges on Monday, sending the British pound tumbling to a new low in Europe. It cost 1.3960 dollars to buy one pound sterling, cheaper than the 1.4040 dollar price last Friday. The previous all-time low was 1.3972 dollars last January 11. Dealers said the market ignored a higher than expected 1.1 per cent fall in the March index of leading U.S. economic indicators and a decline in U.S. singlefamily home sales in March. Currency traders attributed the dollar’s strength to a perception that U.S. interest rates are headed

higher while inflation continues to moderate in the United States, a combination of factors that would keep returns attractive on dollar-denominated nvestments.

With the dollar strong, gold prices edged lower in quiet activity. Earl Johnson, a currency trader at Harris Trust and Savings Bank in Chicago, said increased business borrowing this year, an upcoming round of treasury borrowing, and expectations of a pickup in growth of the U.S. money supply may all have led invesors to expect an increase in interest rates.

Even if the U.S. economy slows, he said, “it is not likely to have much impact on interest rates.”

Meanwhile, a threat ol strikes in West Germany has hurt the mark, analysts said.

Dollar rates in New York, compared with late rates on Friday, were: 2.71825 West German marks, up from 2.7090; 2.24625 Swiss francs, up from 2.23725; 8.3455 French francs, up from 8.3125; and 1.28725 Canadian dollars, up from 1.28155. The only currency to gain ground on the dollar was the Japanese yen. Although Tokyo markets were closed, the dollar slipped to 226.605 Japanese yen in New York from 226.80 yen on Friday.

On the New York commodity exchange, gold bullion for current delivery fell ?U51.90 to ?U5376.10 a troy ounce.