Dollar Falls on Profit-Taking

The dollar retreated amid widespread profit-taking early today after seven straight days of record-breaking gains. Gold was a shade higher.

Dealers said trading was moderately active as investors sought to cash in on the dollar’s surge, which took it above 10 French francs and 2,000 Italian lire for the first time ever and 3.30 West German marks for the first time in 13 years.

Dealers said investors seemed worried about the prospect of further central bank intervention. Some were speculating that the West German Bundesbank, sensing the downturn as a chink in the dollar’s armor, might intervene in a big way.

The dollar began the day with a marginal gain in Tokyo. It edged up to a closing 262.55 yen, compared to Wendesday’s 262.50.

When trade opened in Europe, the dollar turned down against most currencies. Against the yen, it was quoted in London at 260.93.

Other rates at mid-morning, compared to late rates Wednesday, were: 3.2896 West German marks, down from 3.3010, a 13-year high; 2.8005 Swiss francs, down from 2.8047, a seven-year high; 10.0550 French francs, down from 10.0650, an all-time high; 3.7253 Dutch guilders, down from 3.7360, a 13-year high; 2,030.00 Italian lire, an all-time high, up from 2,028.37, and 1.34005 Canadian dollars, up from 1.34000.

In London, the British pound was quoted at $1.0927, up from $1.0875 on Wednesday and better than the all-time trading low of $1.0838 reached during Wednesday’s London dealing.

Gold opened in London at a bid price of $303.25 an ounce, compared to late Wednesday’s $302.75. At mid-morning today, the city’s five major bullion dealers fixed a recommended price of $303.40.

In Zurich, the noon bid price was $303.40, up from $302.50 on Wednesday.

Silver was quoted in London today at a bid price of $6.26 an ounce, up from Wednesday’s $6.24.