LOW-PRICED POUND

Dominion, Volume 26, Issue 28, 27 October 1932, Page 9

LOW-PRICED POUND

Causes of Its Decline LONDON OPINIONS Speculators Take Risks Official Wireless. Rugby, Oct. 25. After a further decline to 3.28 dollars the sterling exchange on New York recovered to-day to 3.301 dollars. The low price of the pound is attributed in city circles here to influences of a seasonal character, which are naturally more marked since the departure from the gold standard, accelerated by selling by foreign speculators, whose operations are considered to be attended by a considerable measure of risk to themselves. On the London Stock Exchange today a feature at the close was _ the sharp recovery of the leading British Government stocks, especially War Loan assented at 102. The further sensational fall in sterling is ascribed by the “Evening Standard” to the recall of French funds for impending State loans, also to bear attacks in Paris and Amsterdam, based on unfounded rumours that the British exchange equalisation account is exhausted, and that Britain is short of dollars for December repayments. The "Standard" hints that the Treasury and the bank will shortly intervene with disastrous results to speculators. LOWEST LEVEL OF YEAR Sterling in New York New York, Oct. 25. A new low level for 1932 was touched by sterling on the foreign exchanges market to-day, the pound closing I*l cents lower at 3.30 i dollars for cables, rallying from the opening rate of 3.29 J dollars. It was believed that official support had been withdrawn again since sterling’s decline last Tuesday, when currency was stabilised close to the 3.40 dollars level.

Bankers here said British support would come again when sterling reached a level that could be supported with greater ease, but no Indication of that level was forthcoming. The Canadian dollar closed one cent lower at 91 1-8 cents, after opening at 92. EQUALISATION FUND Its Relation to Exchange Official Wireless. Rugby, Oct. 25. Answering in the House of Commons a question as to whether speculative attacks ou sterling had been checked by the exchange equalisation account, the Chancellor of the Exchequer, Mr. Neville Chamberlain, replied that he was unable to say to what extent speculation in exchange existed, but he had no doubt that reserves of foreign currency in this account acted as a deterrent against the activity of speculators. The purpose of the account was to prevent excessive fluctuation in the value of currency, and it was never Intended to keep exchange at a fixed price or keep It within a fixed range of values in opposition to seasonal or other tendencies.