AMERICAN EXCHANGE RATE.

Taihape Daily Times, 12 August 1919, Page 5

AMERICAN EXCHANGE RATE.

FALL OF THE SOVEREIGN. EFFECT UPON BUSINESS. The American exchange rate is now 4.34 that being the price per £1 quoted in Auckland on Friday by the banks for a draft on the United States. Putinto clear language this means that in converting dollars to sterling only 4 dollars 34 cents are now required to pay for a sovereign, compared with 4.85 before the war. At 4.80 to the sterling the American dollar is Worth the familiar 4s 2d, at which it is usually taken for rough calculation. For a long time before the war, however, the exchange was at 4,85 to the £, equivalent to 4s lgcl to the dollar. The present fall in exchange makes the dollar worth about 45 7§d. Theresult is that, whereas, prior to the War, it only required 4s jgzd to buy goods in New Yer}? worth one dollar, it requires to-day 4s 7?;d, so that everything impOl"rCd from America costs 12 per cent. more in exchange only. The fluctu:ations in the rate of exchange have nearly all taken place in the last five months. About March last the rate suddenly fell from about 476 to 4.50. By April it was back to 4.67, in May it was 4.62, and in July it was down to 4.27, which was lower than it ever fell in 1915, when the market first felt the eflects of the phenomenal American trade, which was destined to play such‘a pl'Omillr_'nll part in the war. _