European Stars and Stripes (Newspaper) - April 22, 1990, Darmstadt, Hesse                                Page 18 a the stars and stripes business new misleading Trade report hurts Dollar when is an improvement in the . Trade deficit not Good news the answer goes a Long Way toward explaining Why the Dollar languished on world currency markets last week despite a report from the Commerce department that americans monthly Trade imbalance fell in february to $6.49 billion the smallest monthly shortfall in More than six years and $2.8 billion better than january a performance. Surprisingly the Dollar weakened against the Mark the japanese yen and British Pound on the Day the Trade figures were released. Currency analysts in Europe said the Trade data Wasny to something to get excited about because the Randy Mcclain improved picture resulted from a Sharp drop in imports. A exports were Down 1 percent which Means . Industry is not going great guns a said Gunter Teich a currency expert with the Bank of Bostons office in Frankfurt West Germany. Meanwhile imports were Down 7.6 percent. A fall in Oil prices from $22 per barrel to $17 per barrel helped reduce the value of Oil imports but economists said this does no to explain the entire drop. A declining Trade deficits which Are led by Broad based declines in imports reflect either a weakening Economy or the recapture of Market share by Domestic producers. In this Case i think it reflects a weakening Economy a said one new York Bank economist. A sentiment toward the Dollar is not All that positive at the moment a said Ian Amstad an economist with the Chase investment Bank in London. Amstad expects the Dollar to drop perhaps three pfennig against the Mark in the next 90 Days. Later in the year he sees the Buck falling As Low As 1.60 Marks. In Amstady a View the Dollar s weakness in Europe is caused by  that Samstad a term for a sluggish . Economy coupled with dangerous inflation. Currency experts concern Over inflation came to the forefront last week with the release of a report showing . Consumer prices surged by an unexpected 0.5 percent in March. The currency Market had expected an increase of Only 0.2 percent primarily because of falling Oil prices. Amstad said a Check of consumer Price reports for the past six months shows a potential Long term problem for the . Economy. Not counting food and Energy prices which Are subject to wild seasonal swings inflation still is running at an annual rate of More than 6 percent. The London currency analyst said that scenario could be a Boon for the Dollar if the . Federal Reserve were to boost interest rates soon. But he does no to expect that to happen. A your Bank s View is that the fed wont tighten rates in the . Over the Short term a he said. And that strategy should serve to keep the Buck in Check against the Mark and the British Pound. Interest rates in great Britain Are around 15 percent and that looks Sweet to investors when compared with the prevailing 8.25 percent Short term rates available in the states Amstad said. A Money goes to the highest yield in foreign Exchange markets a he added. On Friday in european trading one Pound was Worth slightly More than $1.64, about the same As a week earlier. In West Germany the value of the Dollar was set at 1.65 Marks at military Bank outlets. That rate which is one pfennig better than a week earlier will be in effect through monday afternoon. But done to expect further gains. A in general i see a stable Dollar a Teich said. A there wont be too much movement at this stage a Only a pfennig or two up or  tha surs and strip a credit unions scheduled to begin Selling Marks soon by Randy Mcclain financial writer several credit unions in West Germany should Start Selling Marks Over the counter in May under a defense department plan to increase outlets for foreign currency sales worldwide. Expanded sales of local foreign currencies to service members in England South Korea Japan and other nations where . Troops and airmen Are stationed probably wont be far behind. In addition to credit unions the new directive allows military clubs and other non appropriated fund organizations to sell foreign currency Over the counter at the same favourable rates previously offered Only by Community Banks. All the agencies will get their Marks British pounds or other currencies from the Community Bank in their area. No clubs around the world have Long sold foreign currency to service members but the rates offered generally lagged behind those available at the Community Bank by a Penny or two. A few credit unions in Germany also have sold Marks Over the counter for the last few months As a test of consumer demand. The test showed there is sufficient demand for More foreign currency outlets and the defense department now has decided to go full Speed ahead. Credit unions and Naf organizations will have two options when it comes to Selling foreign currency. They will be allowed to a direct Purchase foreign Money from the Community Bank m their area and then resell it. Or they can sell the Money As an agent of the Bank. If they choose the latter option they will have to report All sales and will be subject to unannounced Cash counts by Community Bank employees throughout the Day. If a credit Union opts for the direct Purchase method it will buy foreign currency from the Bank at a slight discount and then resell it to customers at the same rate being offered that Day by the Bank. Daily rates Are established each afternoon based on the dollars strength on world currency markets. Recently the Dollar has been trading in the neighbourhood of 1.65 Marks in West Germany. The catch is that if the Dollar changes in value before a credit Union can sell its foreign Cash the company will have to live with any gain or loss. Henry Addison senior vice president with Andrews Federal credit Union in Frankfurt West Germany said his company will sell Marks but it wont use the direct Purchase method. The risk of loss is too great he said. Addison said his credit Union will simply act As an agent for the Community Bank. Under this setup Andrews will get a daily Supply of Marks and pocket a Small commission to cover operating costs. Customers wont notice any difference though.  be Able to buy foreign currency at identical rates no matter where they go. Finance Federal credit Union in Augsburg West Germany said it Hopes to Start Selling Marks no later than May 15. Ben Russ a finance Federal vice president said a a it a just a matter of us getting together with merchants National Bank on a procedure for the delivery of Marks As needed probably on a daily  merchants is the military banking contractor in West Germany England Greece and the Netherlands. Russ said he expects foreign currency sales to be popular with his credit Union members. West German Mark sales will be offered at All seven finance Federal branches he said. Service Federal credit Union is another company interested in Selling Marks according to a spokesman at the company Headquarters in Kaiserslautern West Germany. Pentagon officials in Washington said they expect numerous organizations to jump at the Chance to sell foreign currency. Non appropriated fund organizations in Guam Okinawa and Japan have expressed an interest in the new procedures and Usa Federal credit Union which operates in Japan and South Korea will probably be a player too a Pentagon official said. In Britain Keesler Federal credit Union probably will Start Selling pounds to service members soon. Charles h. Belhassen senior vice president for the United kingdom said the Sale of pounds Likely will Start at the Raf Lakenheath Branch 25 Miles Northeast of Cambridge. A after a few weeks Well expand to our other seven branches in England a Belhassen said. Cafes drops 12 Beer suppliers by Steve Taylor and de Reavis staff writers Munich West Germany a the army and air Force Exchange service has cancelled contracts with 12 private european Beer suppliers because the companies refused to comply with new warning Label requirements. The labels required by . Law on alcoholic beverages sold in the United states after last Jan. 1, was expanded by the department of defense to include alcoholic beverages sold in cafes outlets overseas spokesman capt. Wes Davis said. That requirement took effect for alcoholic beverages bottled after april 1. Cafes Europe which sold about $ 12 million Worth of foreign Beer last year asked its suppliers whether they would comply with the requirement. Twelve of the 64 Beer companies said they would not. Davis said the 12 companies that declined to put the new labels on their bottles made up 3 percent of total Beer sales. Beverage companies that Supply the Exchange system with foreign made wines or spirits have told cafes they would add the labels Davis said. The Label says a according to the surgeon general women should not drink alcoholic beverages during pregnancy because of the risk of birth defects. Consumption of alcoholic beverages impairs your ability to drive a car or operate machinery and May cause health  two Munich breweries Vaulner and spate Brau decided not to use the labels. Heinz Aschberger marketing chief at Vaulner described the change As a a pure logistical problem for Johm Blu Ink Apfl Skiff _.    -4 us. A in addition its not economically feasible for us to a amps Gus Schuettler this warning Label required by Law on alcoholic beverages sold in the United states was expanded by the department of defense to include alcoholic beverage sold in cafes outlets overseas. Comply with the new american demand. We Don t sell enough to make it Worth our while a Aschberger Sai. At spate Brau marketing director Edgar Wangen said the change Wasny to Worth the Cost and Eft a the switch would have forced the company to Puy machine to fill and Label the bottles Wangen said. He also said it was not possible a to  we Export to the . That has the Label and re it to the military Here. Its a tax problem Export Beer comes under different tax Regula than Beer brewed and sold Here in Germany. Other Brewers had no problems making t e change. Uwe Andresen marketing director Beer in Pitburg said a the investment i 1i by because we can use the capability to put t the Back of bottles destined for other markets. At Lowenbraun in Munich pro duct manager p. Ried Escher said the company which is exporter already has the extra Labelling Mac a