Evening star. [volume] (Washington, D.C.) 1854-1972, 1957-08-22
u. S. Dollar Seen Firm
Despite Discount Setup

cause the Canadian dollar il
in short supply and great de.
mand.
Americans want it for invest
ment in Canadian securities
and property. Many West Eu.
ropeans are frightened by the
shakiness of their own curren-
cies and are putting their funds
into Canadian or American Sc
curitieS or cash.
On the 90-day futures for
eign exch ange market the
American dollar is selling at q
S per cent discount from the
German mark.
Spectators in foreign cur
rency and German exporters
have been expecting a revalua-
ton upward of the German
mark. The German govern
ment has just taken pains tc
deny 1t has any plans for that
Changes in currency valua-
ton are customarily denied
right up to the zero hour)
Foreign spectators have
put many millions of dollars
into German marks. thinking
TO make a quick profit of about
10 per cent if the mark is re-
valued upwards in terms OF
dollars-or to escape a loss if
other European nations follow
Frances move toward devalua-
ton Of the franc.
The foreign exchange market
is also seeing flight from the
English pound sterling to the
Canadian dollar and the Ger
man mark. Talk of the posi-
oility of devaluation of the
pound has become so wide.
spread that the British gov.
eminent felt compelled to DENY
any such intention. But for
eign traders don't want to hold
either pounds or francs longer
than they have to. just in case.
Wobbliness of the French
franc is the most disturbing
element in European finances.
An across:the-board devalua-
ton of the franc would seem
sure to bring on a general re-
valuation of European cur
rencies in terms Of the Ameri-
can dollar. Some look for the
French to act next month.
There is no flight from the
american dollar to the Cana.
dian dollar. What is happening
is that Americans are invest
ing millions in Canadian re-
sources and its growing in
dustries. Canadian corpora
Tons come here to borrow
money and float securities. be-
cause they can save money
here. While American interest
rates have been rising. Cana
dian rates are still higher. SO
that borrowing is cheaper here.
But all these American funds
and the fleeing currencies of
Europe must be turned into
Canadian dollars to be put to
work there. This demand for
the Canadian dollar has sent II
steadily up. At $l.06 American
It has surpassed its previous
nigh OF $l.05l2 in November,
1898.
The German mark is so
strong 1t has a balance-of pay
ments surplus Of more than SIS
billion 90 billion marks) in its
foreign trade dealings with its
neighbors. Only with the dollar
area is West Germany running
a trade deficit.
West Germany, with the ex-
ception Of Switzerland. has the
strongest financial setup in Eu-
rope.
Bonn doesn't want TO mark
the value UP in terms OF the
dollar because that would make
German products. like the
Volkswagen, more expensive
here and hurt their competitive
position. On the other hand. It
would bring German products
more in line pricewise with
those Of its European neigh
bors and lose its manufacturers
the advantage they now enjoy
there.
But the growing strain on
many currencies may force a
general reShuffling of values in
terms Of the dollar in coming
weeks or months.