Dollar Hits 74c

Sun Herald

Saturday August 5, 1995

From BRETT THOMAS in New York

THE dollar soared to US74.30c despite a stronger US dollar as speculators and investors re-assessed commodity prices.

The surging dollar also defied Wall Street's apathy towards Australian shares as the Dow dropped 18 points to 4,683.5.

Strong interest in commodities buoyed the dollar which rose almost US1c overnight. Ironically, commodity prices were slightly weaker.

The stronger dollar is despite the second largest ever current account deficit. If it is sustained it should rule out any lingering suggestions of a rise in interest rates.

But a cut still seems some way off as the bond market continued to weaken, with the yield on 10-year bonds rising 8 points to 9.42 per cent.

As the US dollar rose to a three-month high to 91.43 yen after an improved bond market and Japan's announcement earlier in the week of a plan to weaken the Japanese currency, it pulled the Australian dollar up with it.

The US dollar shrugged weaker than expected job growth with payrolls rising 55,000 in July, below projections of a gain of 125,000 jobs. Housing starts also weakened.

The benchmark 30-year US bond rate edged down to 6.91 43 41per cent. Other markets were mixed.

LONDON: The FTSE100 climbed 7 points. With no major British economic figures out the focus was on US jobs data for July and equities gave a subdued response to the weaker than expected growth.

FRANKFURT: The German share market slipped 4 points in light turnover. There was a lack of new orders needed to rekindle a rally. The DAX30 rose six points over the week. HONG KONG: The Hang Seng fell 17 points to end at 9,362.8 - a fall of 89 points over the week. Trading was subdued by a lack of fresh local incentives and concerns over Wall Street, said brokers.

TOKYO: Shares fell 153 points in thin trade. Arbitrage-linked selling and profit-taking capped the topside, while foreign buying was less active.