STERLING DECLINE

Manawatu Standard, Volume LII, Issue 2, 2 December 1931, Page 7

STERLING DECLINE

NEW LEVEL IN NFW YORK.

YESTERDAY’S SELLING

QUESTION OF STABILISATION. (United Press Association—By Electric Telegraph.—Copyright.) Received December 2, 9.25 a.m. NEW YORK, Dec. 1. The pound sterling to-day continued its abrupt decline, breaking more than nine cents to 3 dollars 30 cents. This is the lowest in ten years, and only twelve cents above the record low quotation of 3 dollars 18 cents, which was reached prior to the return, after the war, to the gold basis. Selling continued from all sides, from Britain, France, Holland and other principal financial qountries.

According to advices from Wall Street, no efforts have yet been made on the part of the British Government to stabilise the pound, tho present intention apparently being to let it seek its natural level.

Although the French bankers and the French Government are said.to be favourable to stabilisation, and are reported from Paris to be willing to advance credit, Wall Street bankers doubt that such a move would be attempted at an early date. Britain’s foreign trade, according to reports, is being stimulated by the lower price of the sterling. An earlier message from London stated: The worst break in the sterling since the earliest days of the suspension of tho gold standard startled the country. The newspapers feature the rate on New York as 14s and Paris as 14s Old, with lengthy explanations and speculations. The Financial Times describes -it ns a veritable “Black Monday.” The principal factor was a “bear” raid by Continental operators. The Financial News says that wellinformed members of tho Stock Exchange are not alarmed. It is believed that the day’s turnover on the foreign market was quite modest. The fall was excessive and is attributed chiefly to sales of the sterling by nervous foreign holders and purchasers of currency in order to pay for recent imports on a market devoid of support.

NO CAUSE FOR ALARM

NEWSPAPER ANALYSES POSITION.

(British Official Wireless.) Received December 2 11.10 a.m. RUGBY, Nov. 2. Commenting on the fall in the pound, the Times emphasises that the movement is wholly out of relation to the volume of business and there is no cause for alarm. t

The paper states: “A number of temporary or artificial factors are operating in the market at present which account, for the lack of support. Prominent amongst them are the restrictions placed upon dealings in exchange in foreign countries which prevent foreigners in many cases from buying sterling, though no difficulties are placed in the way of the British importer paying for his purchases abroad and selling sterling. “The fact that a War Loan dividend will be paid to-day also may have caused some foreign holders to sell sterling. These factors are sufficient to cause a fall, but they have no important significance.” MARKETS BRIGHTER. The London . stock markets opened with the listings brighter to-day. Encouraged by Wall Street and a certain amount of bear covering, leading British funds were one-eighth to a quarter better in places despite the sterling’s fall to 3.28 dollars. PRICE OF GOLD. Received December 2, 9.10 a.m. LONDON, Dec. 1. The price of gold is £6 5s per oz. — the highest on record.