Dollar Edges Lower in Europe; Gold Advances
The dollar edged lower against major European currencies early today as investors pondered the prospect of further central bank intervention. Gold prices gained.
Dealers said worries about banks selling large blocks of dollars to drive the currency’s value down outweighed the boost the U.S. currency got from this week’s gross national product figures, which showed America’s economy booming.
One unconfirmed report quoted Japanese sources as saying the Group of Five finance ministers had set specific intervention levels when they met last week in Washington.
Meeting of Ministers
The meeting of ministers from the United States, West Germany, France, Britain and Japan came as the dollar set records against the British, French and Italian currencies.
Large-scale intervention was reported on Tuesday, dampening a dollar surge.
However, dealers said no attempt was made Wednesday to defend the British pound, which sank to an all-time London closing low of $1.1125.
The pound, also under pressure from falling oil prices which cut into Britain’s North Sea oilfield income, hit $1.10 during trading in Hong Kong last week.
The pound gained marginally today to $1.1156.
Other currencies also strengthened against the dollar. At mid-morning, one dollar bought 3.1678 West German marks, down from 3.1785 late Wednesday; 2.6675 Swiss francs, down from 2.67625; 9.6915 French francs, down from 9.7115; 3.5792 Dutch guilders, down from 3.5880; 1,949.75 Italian lire, down from 1,951.00, and 1.32375 Canadian dollars, up from 1.32585.
In Tokyo, where trading ends before Europe’s business day begins, the dollar slipped to a closing 254.08 yen from Wednesday’s 254.13. Later, in London, it was quoted at 254.00 yen.
Gold Rises
Gold opened in London at a bid price of $302.10 an ounce, compared to late Wednesday’s $300.75. At mid-morning today, the city’s five major bullion dealers fixed a recommended price of $301.90.
In Zurich, the noon bid price was $301.75, up from $300 late Wednesday.
Earlier, in Hong Kong, gold dropped the equivalent of 62 cents to close at a bid $303.21.
In New York Wednesday, gold fell $2.10 to close at $301.40.
Silver was quoted in London today at a bid price of $6.03 an ounce, up from Wednesday’s $5.965.
