DROP HALTED

Southland Times, Issue 21848, 27 October 1932, Page 5

DROP HALTED

STERLING VALUE RECOVERY IN NEW YORK BRITISH STOCKS IMPROVE (British Official Wireless.) Rugby, October 25. After a further decline of 3.28 dollars sterling on New York recovered to-day to 3.30}. The low price for the £1 is attributed in city circles here to imluences of a seasonal character which naturally are more marked since the departure from the gold standard and 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 in leading British Government stocks especially the War Loan (assented) at £lO2. Answering the House of Commons question whether the speculation attacks on sterling had been checked by the exchange equalization account, the Hon. Neville Chamberlain replied that he was unable to say to what extent speculation in the exchange existed, but he had no doubt the reserves of foreign currency in this account acted as a deterrent against the activity of the speculators. The purpose of the account was to prevent excessive fluctuation in the value of currency and it was never intended to keep the exchange at a fixed price or keep it within the fixed range of values in opposition to seasonal or other tendencies. NEW LOW LEVEL THE CANADIAN DOLLAR. New York, October 25. A new 1932 low level was touched by sterling on the foreign exchanges on Tuesday, the £1 closing one and three-quarters lower at 3.30} for cables and rallying from the opening rate of 3 29J. It was believed that official support had been withdrawn again since sterling’s decline last Tuesday when the currency was stabilized close to the 3.40 level.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 91J cents after opening at 92.

HINT OF REPRISALS TREASURY BANK INTERVENTION. London, October 25. The further sensational fall in sterling is ascribed by the 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 exchange equalization fund is exhausted and that Britain is short of dollars for December repayments. The Standard hints that the Treasury bank will shortly intervene with disastrous results to speculators.