Dollar Drops Abroad; Gold Also Declines
The U.S. dollar fell today against most major currencies in slow, pre-holiday trading in Europe. Gold prices also dropped.
Dealers said some traders sold dollars so they wouldn’t be holding them over the May 1 holiday, which will close many European markets on Wednesday.
They also said the dollar was depressed by news that the U.S. index of leading economic indicators fell 0.2% in March. Many analysts had been expecting an increase, and some traders viewed the decline as a sign of slowing economic activity in the United States.
That could lead to lower interest rates, which would make the dollar less attractive to foreign investors.
The dollar had surged to record highs in Europe in February and then sagged when it seemed that forecasts of American economic growth had been too optimistic. The dollar bounced back last week.
Before trading began in Europe on Tuesday, the dollar fell in Tokyo to close at 251.40 Japanese yen from 252.40 yen on Friday. Monday was a public holiday in Japan and its foreign exchange markets were closed.
In London, the British pound rose to $1.2347 from $1.2312 on Monday.
Other late rates in Europe compared with Monday’s late rates included: 3.0975 West German marks, down from 3.1235; 2.5900 Swiss francs, down from 2.6215; 9.4375 French francs, down from 9.5250; 3.5050 Dutch guilders, down from 3.5315; 1,981.70 Italian lire, down from 1,992.50, and 1.3662 Canadian dollars, down from 1.3687.
Trading in gold bullion was also quiet, dealers said.
Gold closed at $321.00 an ounce in London, compared with $323.30 on Monday. It closed at $321.50 an ounce in Zurich, down from $322.60 on Monday.
Earlier, gold had risen in Hong Kong to close at $325.44 an ounce, up from $324.05 on Monday.
Silver bullion traded late in London at $6.285 an ounce, up from $6.26 in the previous session.