Government Report Helps Push Dollar Down

The dollar fell against major European currencies in volatile trading Wednesday after a government report of the steepest decline in U.S. business productivity since the last recession.

William Orsini, a foreign exchange analyst at the New York branch of Bank of Montreal, said the dollar began losing ground after a Labor Department report that business productivity fell at a 2.5% annual rate in the first quarter of 1985.

While the dollar fell broadly against European currencies, it rose against the Japanese yen and Canadian dollar.

Gold fell in Hong Kong but later rebounded in Europe and the United States as the dollar retreated. Republic National Bank in New York said gold bullion was bid at $315 an ounce as of 4 p.m. EDT, up $4.25 from the late bid Tuesday.

Dealers said traders were awaiting today’s scheduled release of the April index of leading economic indicators for clues on where the U.S. economy is headed.