Following the chaos in European Money Markets which closed last Friday (6 July) with the United States Dollar plunging dramatically, there was much trepidation on Monday (9 July) when the Markets reopened.
GV Bahnhofstrasse, Zurich
GV EXTERIOR Banks (3 shots)
SV Exchange rate board
SV TILT UP people walking into bank
GV & SV People changing money (3 shots)
GV & SV INTERIOR Foreign exchange dealings (4 shots)
CU EXTERIOR Beirut Bank in Lebanon
GV & SV Gold on display in market (2 shots)
SV People passing exchange office
GV & SV EXTERIOR Frankfurt money exchange
GV & SV INTERIOR dealers in exchange (3 shots)
SV Dealer writes up the rate against the US Dollar on blackboard
SV Dealers on Phone
SV People opening and drinking champagne
GV & SV People changing money at Frankfurt Airport (small change for dollar) (3 shots)
Initials ES. 3.54 ES. 4.19
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Background: Following the chaos in European Money Markets which closed last Friday (6 July) with the United States Dollar plunging dramatically, there was much trepidation on Monday (9 July) when the Markets reopened.
The US Dollar continued to fluctuate wildly in confused Foreign Exchange dealings as the world awaited action by governments to restore order to the markets.
Although the US Dollar initially rose from last Friday's record lows against other major currencies, it quickly dropped again in the absence of any concrete action.
Foreign Exchange dealers throughout Europe expressed scepticism about the likelihood and even the usefulness of Central Banks entering the market to buy Dollars and support the currency's depressed exchange rate. But the Dollar rallied again in the late afternoon after reports from Zurich that the United States would intervene to support its currency. Rumour was rife on Wall Street i New York's money district that the Federal Reserve would shortly move to halt the Dollar slide, prompted by a variety of factors, with the Watergate scandal among the foremost. There was no Governmental confirmation of this action.
Coupled with the Dollar plummet is the Pound Sterling which has taken a number of severe knocks over the past few days. Although the immediate effect of this "cheap money" from the United States and the Sterling area is to promote the sales of exports at bargain prices, the man-in-the-street has felt the pinch on his holiday pocket. Both Americans and Britains abroad have suddenly found themselves with a lot less to spend than they had planned on.
While the ordinary people worry about their cash, the big bankers are playing the buying-selling game at a fast and furious rate.
In Switzerland dealing was brisk all day Monday as speculators ranged themselves against the British and American currencies.
In Beirut, Lebanon - the place they call the Switzerland of the Middle East - gold was the stuff everyone was after. The comparative stability of the mineral makes it an attractive investment in one of the few places where it is on sale in the open market. The "free" Lebanese gold market was a place of much trading as dealers and the wealthy shopped around for the best prices. In London the price of gold was fixed at 126 US Dollars an ounce, but in Paris, France gold rocketed to a new peak price of 134,53 US Dollars an ounce.
On the West German markets the Dollar see-sawed all day long closing at 2,3088 marks, higher than last Friday's close but lower than the morning opening rate of 2,3350 marks. Dealers said the medium and long-term outlook for the American currency remained uncertain. Sterling continued to grow a little stronger with a firmer trend and, at the close stood at 5.92 marks, only a shade below its opening level of 5.93 marks.
British Chancellor of the Exchequer Anthony Barber said in London on Monday that "what the past few weeks has established beyond doubt is the urgency of working out a reformed international monetary system".
In Washington the International Monetary Fund (IMF) announced that Finance Ministers of the 20 IMF countries principally concerned with negotiating the reform would meet in Washington on July 30 and 31.