The announcement on Wednesday (26 July) that the United States trade deficit had narrowed to 1.6 billion Dollars in June was the first good news for the dollar this week, and immediately sent its value shooting up on foreign exchange markets.
GV EXTERIOR: Tokyo Money Exchange.
SV INTERIOR: dealers at work.
SV: woman using computer.
SV ZOOM INTO: board showing dollar below 200 yen.
CU: Lloyd's Bank sign
SV INTERIOR: Exchange rates board showing dollar's position.
CU: Mr R.D. Knights, Manager, speaking. (3 shots)
TRANSCRIPT: SEQ. 7: KNIGHTS: "This is a market which is made by professionals, bankers and customers, and I think it's more correct to think terms of a rate at which the market believes that central banks are going to intervene to make a stand to defend a rate, rather than a psychological barrier as such. There's no magic really in two hundred."
REPORTER: "And how much further do you think the dollar will go?"
KNIGHTS: "Well, you appreciate this is a personal opinion, but my belief is we're not seeing the same sort of dramatic movements as a short time ago. I believe, myself, that over the next two, three months, we're going to see the dollar moving within the range 195-205, which is, I suppose, significant, but not a dramatic fall from its present level."
REPORTER: PAUL TOULMIN-ROTHE
Script is copyright Reuters Limited. All rights reserved
Background: The announcement on Wednesday (26 July) that the United States trade deficit had narrowed to 1.6 billion Dollars in June was the first good news for the dollar this week, and immediately sent its value shooting up on foreign exchange markets. After an almost-continuous fall against major currencies since Monday (24 July), the Dollar recovered some of its strength, though it still remained the steadily-rising Japanese Yen.
SYNOPSIS: On Monday (24 July), the dollar had slumped below the rate of two hundred Yen for the first time since world War Two. They day saw some of the most hectic trading ever on the Tokyo Foreign Exchange Market. The fall was triggered by reports that the Organisation of Petroleum Exporting Countries (OPEC) may base oil prices on a combination of foreign currencies instead of, as at present, just the dollar.
Lloyd's Bank International Manager for Japan, Mr R.D. Knights, said he did not expect a further dramatic fall.