Word: franc
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Dates: during 1970-1979
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...Japan last week shaped the faint outlines of a deal. It calls for the U.S. to devalue the dollar by 5% or 7%, by raising either the price of gold or the price of the international Special Drawing Rights. There would be little or no change in the French franc or British pound, but because the dollar would be devalued, French and British goods would tend to be 5% to 7% costlier than U.S. exports...
...well have begun last week, when Richard Nixon and Pompidou announced that they will meet for discussion later this month in the Portuguese-owned Azores. The President will be accompanied by Treasury Secretary John Connally and Pompidou by Giscard. Among likely topics of discussion is what adjustment France will be willing to make in the exchange rates between the franc and both the dollar and the mark. Giscard says that he is prepared to exercise further economic leadership "at the proper time" but makes it clear that there can be "no progress" until the U.S. sets forth a more specific...
...formal acceptance of these new values, if combined with about a 5% to 8% devaluation of the dollar in terms of gold, would go far toward meeting Washington's immediate goal. On the foreign side, Pompidou flatly opposes revaluation of the franc, but many other governments recognize that official exchange-rate readjustments are necessary in order to correct the obvious overvaluation of the dollar. "We all know what needs to be done," says The Netherlands' Jelle Zijlstra, chairman of the Bank for International Settlements. Japanese delegates, for instance, are reluctantly prepared to offer an 8% revaluation...
...would drop in relation to other currencies and thus make U.S. goods cheaper in world markets. The first test of this strategy proved mildly hopeful. The dollar drifted down slightly in money markets, but nothing like the expected 12% to 15%. At the close of trading last week, the franc had risen by 2.8% in relation to the dollar, the mark by 7.6%, the Swiss franc by 2.5%, and the pound by 3%. Put on a limited float at week's end, the Japanese yen rose as much as 7% in the first day's trading...
...guard against an outbreak of speculation should the dollar begin to sink in the weeks ahead. As the week progressed, that plan hardly seemed necessary. With the Swiss Central Bank poised to buoy up the price of the dollar if it fell below an undisclosed "base level," the Swiss franc merely wobbled fretfully anywhere from 1.2% to 2.8% above its normal dollar exchange rate. In Paris, where a complex two-tier system separates fixed-rate international trade and business dollars from tourist and capital investment dollars, the U.S. currency stayed within 3% of parity for free-floating transactions. In London...