Foreign exchange

Title

Foreign exchange

Creator

Ancheta, Leon

Language

English

Source

The American Chamber of Commerce Journal Volume XVIII (Issue No.3) March 1938

Year

1938

Rights

In Copyright - Educational Use Permitted

Fulltext

March, 1938 THE AMERICAN CHAMBER OF COMMERCE JOURNAL 43 FOREIGN EXCHANGE By Leon Ancheta Manager, Poraign Dept., Phil. Nat. bank Closing last month at 200.50 for T.T. New York with a strong un dertone, the dollar rose to 200.75 at the beginning of February. Its upw a r d movement unchecked up to the end of the third week when it reached 201.50, the highest reached during the last four years. As the first fortnight of the month advanced there was noted an increasing demand for T.T. dollar coinciding at a time when, sea sonally, local banks have a low supply of dollar exchange. Buyers observed that the growing tightness of the dollar indicated an approaching depletion of the stock of local banks and suddenly bought heavily for coverage. The dollar’s rapid rise was checked as local banks bought from the Philippine Treasury substantial amounts of this exchange to replenish their supply. Thereafter the dollar became visibly easier and toward the close T.T. on New York receded from 201.50 to 201.25 Sixty days dollar bills on New York ruled between 199.25 and 199.75, with buy ers disposed to bid at better rates for prompt deliveries. Compared with the same period last year when T.T. New York was selling as low as 199, and 60-day bills at 198, the dollar’s appreciation in terms of the peso represented about 15% per annum and 10% % covering a three-month period, respec tively. In the foreign exchange market, the dol lar in terms of pound sterling ruled quietly steady until towards the close of the sec ond week when it weakened sharply, re ceding from an opening rate of 501 to u02%. The immediate cause was the im pending partial abandonment of the gold sterilization operations of the United States treasury whereby gold acquisitions up to $100,000,000 each three months would be allowed to increase excess reserves without any offsetting action by the Treasury. When the new policy was announced, uie dollar moved rapidly downward reaching 503% toward the close of the third weex and was cnecked only after President Roosevelt declared that there was no in tention to inHate the dollar. The British Exchange Equalization Account helped in easing the tension by not withdrawing gold from America so long as the dollar was under the influence of nervous selling, ihe President’s announcement had a reas suring effect as the dollar munediatcii, closing at 502. Last year, at the same period the dollar was quoting at an average of 489-11/32. The situation in the French Franc ap peared generally to have improved after the crisis in January. The rates moved irregularly above 328%, last month’s clos ing rate. Toward the close, however, it again weakened sharply, reaching 325% due to to renewed labor troubles and fears of another possible cabinet crisis. Last year at the same period, French Franc was quoted at an average of 465%. The weakness of the Yen noted in the previous month continued although its movement downward was within very nar row range. Opening at 29.08 it moved down to 29.04 and then back to 29.08 at the mid dle of the month when the dollar was un der heavy selling pressure. However, as the dollar recovered, it weakned again, closing at 29.04. Like the previous month, Japan continued to be a keen bidder of foreign exchange selling yen generally, be low the level of the New York market. Hongkong rates again moved up reach ing a high of 31.50 and a low of 31.35 com pared with 31.375 and 31.30 respectively of the previous month. Shanghai was also slightly up ruling be tween 29% and 29% compared with 29-21 32 and 29-17/32 of the previous month. EVERETT TRAVEL SERVICE Authorized agents-all lines STEAMSHIP-AIR-RAIL RESERVATIONS AND TICKETS ITINERARIES PLANNED TOURS-CRUISES ARRANGED HOTEL RESERVATIONS TRAVELERS CHEQUES-INSURANCE LETTERS OF CREDIT NO BOOKING FEE CHARGED. Southern Island Cruises Cebu—Dumaguete—Zamboanga Cotabato—Jolo Twelve days through the Sulu Sea NINETY PESOS Sailing Every Thursday New m/s. Legazpi—s. s. Kinau EVERETT STEAMSHIP CORP. 223 Dasmannas Manila, P. I. Phone 4-98-91 FOREIGN EXCHANGE REVIEW COUNTER RATES U. S. Dollar* High Low Sterling High Low High Low Yen High Low Shanghai High Low Hongkong High Low January, 1937 .................................................... 199.50 199.25 2/0 3/8 2/0 7/16 9.45 9.45 58.90 58.60 59.75 59.60 63.15 63.05 January, 1938 ................................................... 200.75 200.25 1/11-11/16 1-11-13/16 7.00 6.75 57.80 57.00 60.40 59.80 61.80 61.69 February, 1937 ................................................. 199.50 199.25 2/0—3/8 2/0—7/16 9.45 9.40 57.60 57.50 59.90 59.70 61.55 61.15 February, 1938 ................................................. 201.75 200.75 1/11- 7/16 1/11-11/16 6.95 6.85 59.00 58.60 60.30 59.80 63.80 63.35 Philippine Trust Company sells drafts and cable or radio transfers for the payment of money anywhere in the United States, the principal cities of Europe, China and Japan. It receives checking accounts in Pesos, Savings Accounts in Pesos or United States Dollars, Fixed Deposits and Trust Accounts. Fidelity and Surety Company of the Philippine Islands executes and covers BONDS INSURANCE Court, Customs, Firearm, etc. Fire, Life, Marine, etc. Plaza Goiti and Escolta Tel. 2-12-55 I’. O. Box 150 IN RESPONDING TO ADVERTISEMENTS PLEASE MENTION THE AMERICAN CHAMBER OF COMMERCE JOURNAL

pages

43

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