FOREIGN EXCHANGE

Hawera & Normanby Star, Volume XLI, Issue XLI, 17 October 1921, Page 5

FOREIGN EXCHANGE

A CHAOTIC CONDITION SLUMP IN MARK.

%X CABUS— VS.B39 ASSOCIATION—COPYHIGU'I LONDON, Oct. 15. The chaotic condition of foreign exchanges has caused some uneasiness oa ■ thj» fcjfcock Exchange, and there is also nervousness regarding the course of events following the Silesian decision, but despite these adverse factors giltedged securities have been an outstaudutg feature of strength, aided by the favourable position and prospects of the money market. There is a likelihood of numerous new issues of "colonials," of which a long queue are waiting their turn, and all seem likely to be absorbed. The New South Wales loan had a good effect on the market, thotigh sales by "stags," who threw their stock on the market directly they received the allotment notes,'-caused its price to ease to about a quarter discount. The extraordinary slump in the German mark has overshadowed all other movements in the foreign exchange market. The immediate cause of the dump is undoubtedly the Silesian decision, but: it is, pointed out that th» rapid increase in inflation and distrust in the mark, which has grown enormously lately both. in Germany and abroad, make almost any depreciation, possible. French financiers suggest that Germany is deliberately encouraging deterioration in _ order to have an excuse for not fulfilling the reparation, terms, and colour is lent to this assertion by a remarkable heading to an Article in the Vossische Zeitung on the "blessings that flow from the fall of the mark. .: ,sbe Vossische says: "The fall makee ;the boom in production and export, which, if artificial, unhealthy and fleetjing, is bringing to-day and to-morrow iextraordinary profits to German industry, guaranteeing "■ German workmen jrork and bread. In none of the great industrial States is there so little unemployment as in .Germany. At the jate at which out money is sinking the anti-dumping laws against us must ' break down; they cannot prevent Ger- ' i man competition forging ahead.*' " | f The decline in the mark is having an effect on several of our markets, i notably metals and wool. Of flat© Ger- |] tturay has been the largest European , ]buyer of copper, the recent decline of j which is almost entirely due to the I of German activity. The Ger- < Man demand at the wool sales also ■ ihows marked diminution compared ; with previous sales. This is a disturb- 1 ing factor, and one well-known wool i Authority says there is undoubted < nervousness regarding the stability of i values for next year's commitments, ( due largely to the fall in the mark j and general disquietude regarding Ger- j Man finance. - : The Lancashire cotton industry has ] .shown a distinct improvement during > ihe last quarter. Higher values for the raw article have stimulated the demand for manufactured articles, but production is not yet at its full stretch," and many operatives are still unemployed.' A satisfactory feature is the appreciation in the value of stocks, which undoubtedly prevented financial t difficulties. There seems to be ground ! to believe that better times are ahead , for Lancashire, and there is little likelihood of trade slipping back to such depression as existed in the early summer," ■ l The prospects for the cotton yard industry are brighter than for a long . time. There is a better demand from most markets abroad, and every likelihood of prices becoming more profit- . able before the end of the year. An improvement in raw cotton prices was * natural sequence of the'- decreased estimates of the output in the United States. According to the latest estimates it is indicated that probably the output will be only 7,500,000 bales, compared with 11^355,000 for the previou* season. ~ | Wheat freights havefurther declined •wing to the cessation-of all enquiry from the Argentine, the North. Pacific, and the East, The full cargo market is left open to America and Australia. Much torinage Gis prepared to go toAustralia1 in ballast, the present figure* Iwing 55s and 60s-, according to the port of loading. The same figures ap--ply to South Australia, while the "Victoria (November shipment) 'figure is' S7s 6d.