Dollar Rallies in U.S.; Gold Declines
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NEW YORK — The dollar mostly rose in U.S. trading Friday to rebound from a broad retreat in European markets.
Gold prices fell in both centers. Republic National Bank in New York quoted gold as of 4 p.m. EST at $327.75 an ounce, down $4.50 from Thursday’s late bid.
The dollar’s decline in Europe spilled over from U.S. trading Thursday, when the currency tumbled after the Commerce Department reported an unexpectedly steep 1.9% drop in retail sales in March.
The report fueled speculation that the American economic expansion was losing steam. It also raised expectations that the Federal Reserve would avoid tightening credit conditions, or might even relax its monetary stance and allow U.S. interest rates to fall.
As a result, interest rates in the money markets fell sharply. But as trading moved to the United States on Friday, American lending charges stopped falling and demand for the dollar picked up, traders said.
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