The U.S. dollar made modest gains against all key currencies in nervous European trading today, uplifted by the failure of Europe's central banks to intervene in the currency markets. Gold prices were off slightly.
But dealers said the dollar took a nosedive near the close when U.S. Federal Reserve Board Chairman Paul Volcker warned anew that excessive growth in the U.S. money supply could reignite inflationary fears in the United States.
In London, the dollar gained slightly against sterling. It cost $1.0550 to buy one British pound, cheaper than $1.0593 late Tuesday.
In Tokyo, the dollar rose to a closing 261.25 yen from Tuesday's 260.70 yen. Later, in London, it was quoted at 261.675 yen.
Other late European dollar rates, compared to late Tuesday, were: 3.4340 German marks, up from 3.4153; 2.9180 Swiss francs, up from 2.9130; 10.4645 French francs, up from 10.4345; 3.8805 Dutch guilders, up from 3.8645; 2,127.00 Italian lire, up from 2,125.50, and 1.4025 Canadian dollars, up from 1.3970.
Gold bullion held steady in thin trading dominated by professionals, dealers said.
In London, the metal fell to a late bid price of $287.75 an ounce, down from $287.80 bid late Tuesday.
In Zurich, it fell to a late bid of $287.50, down from $288.00 late Tuesday.
Earlier, in Hong Kong, gold fell to a closing bid of $287.92 from $289.50.
Silver was quoted in London at a late bid price of $5.655 an ounce, down from $5.685 bid late Tuesday.