Dollar Mixed in Dull Trading; Gold Edges Up
The dollar turned in a narrowly mixed performance Monday in lackluster foreign exchange trading as it continued to retreat from last week’s sharp rise against some currencies.
Gold prices edged up. In after-hours trading, Republic National Bank quoted a bid for gold at $315.25 an ounce, up 75 cents from the late bid Friday.
The dollar had advanced sharply last week after the government reported a bigger than expected gain in personal consumption spending in May and a slightly higher than expected 3.1% estimate of economic growth in the current quarter.
The economic growth estimate, following 0.3% growth in the first quarter, signaled to some currency traders that the U.S. economy was reviving and that, as a result, interest rates were less likely to fall.
Falling interest rates reduce the dollar’s appeal to foreign investors, but rising rates enhance it.
The dollar slipped Friday in what analysts said was a market correction after the sharp gains earlier in the week.
European dealers said some traders were waiting for new evidence on the strength of the economy. The government is to report later this week on durable goods orders in May and the leading economic indicators last month.
Audrey McNiff, assistant vice president at Irving Trust Co. in New York, said the dollar opened in New York at what turned out to be its high for the day against most currencies and then drifted down steadily.
“Some of this downward movement is a correction from last week’s dramatic rise,” she said.
She said that the decline also reflected a growing appreciation by currency traders that the government’s economic growth estimate for the quarter is subject to revision. “That’s in the back of everyone’s mind,” she said.
Several economists have argued that many parts of the economy have shown no signs of revival.
But the dollar was able to score some modest gains, rising against the Japanese yen in Asia and the United States, against the Dutch guilder and Canadian dollar in Europe and against the French franc in the United States.
In Tokyo, the dollar rose to 249.06 Japanese yen, up from 248.32 yen Friday. In the United States, the dollar rose to 248.30 yen from 247.95 yen Friday.
But the British pound rose to $1.2875 in London from $1.2835 on Friday. In New York, the pound edged up to $1.28985 from $1.2865 late Friday.
Other late dollar rates in Europe, compared to late rates Friday, included: 3.0670 West German marks, down from 3.0820; 2.5607 Swiss francs, down from 2.5635; 9.3635 French francs, down from 9.3850; 3.4630 Dutch guilders, up from 3.4585; 1,961.50 Italian lire, down from 1,964.00, and 1.3665 Canadian dollars, up from 1.3655.
Dollar rates as of 4:10 p.m. EDT in New York, compared to late rates Friday, included: 3.06075 West German marks, down from 3.0630; 9.3500 French francs, up from 9.3350; 2.5595 Swiss francs, down from 2.5615, and 1.36365 Canadian dollars, down from 1.36535.
Gold was quoted in London at a late bid of $315.00 an ounce, up from $314.25 on Friday. In Zurich, gold rose to $315.50 an ounce, compared to Friday’s $314.50.
Trading on the Hong Kong bullion market was suspended because of an oncoming typhoon.
Gold for current delivery rose $1.40 to $315.60 an ounce on the Commodity Exchange in New York.
Silver was quoted in London at a late bid of $6.125 an ounce, down from $6.140 on Friday. Silver for current delivery rose 1.2 cents to $6.138 an ounce on the Comex in New York.