Among the main developments:
- There were some signs of renewed adjustment of external imbalances among the major overseas economies in the second quarter, although the underlying degree of correction has been exaggerated by the initial effects of the strong dollar. In volume terms the improvement appears to have been concentrated in Japan and the United States, with a reduction in Germany's current account surplus being almost entirely due to weaker terms of trade.
- In the international capital markets, there was a marked decline in issues of fixed-rate bonds and in arrangements of new euronote programmes in the third quarter. The decline partly reflected seasonal factors, but was also the result of greater currency volatility and rising interest rates: activity in the syndicated credits market, however, remained buoyant.
- In the foreign exchange markets, the US dollar fluctuated fairly sharply in the third quarter, influenced in particular by shifting perceptions of the strength of the US economy and prospects for interest rates. Towards the end of the period, the dollar fell back following the renewed commitment of the G7 countries to preventing a further rise in its value, and reports of central bank sales, and ended the quarter 3,1/4% down in effective terms.