Money: Weathering the Fallout

The world took the fall of the pound with considerable calm. Predictably, 22 other nations devalued their currencies —generally by amounts in line with Britain's painful decision to shrink the value of her pound by 14.3%, from $2.80 to $2.40. The world's major trading countries—the U.S., Japan, Canada, Australia and the Common Market—rerained from retaliatory devaluations. The pound steadied on the money market and comparative tranquillity replaced the turmoil of the week before.

As a symbol of U.S. readiness to defend the dollar, the Federal Reserve Board raised its basic interest...

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