Hits Lowest Levels Since August, 1984, in Early Trading : Dollar Rebounds to Close Mixed

The dollar turned in a mixed performance against other leading currencies Thursday after its earlier decline to the lowest levels since August, 1984.

The British pound, which had spurted up 10 cents in the past two weeks as a leading beneficiary of the dollar’s retreat, fell fractionally as expectations grew that large London banks would reduce lending rates and after Mexico announced that it was cutting oil prices.

The price of gold edged higher in Hong Kong but fell later in quiet trading as the dollar stabilized. Republic National Bank of New York said gold bullion was bid at $314 an ounce, down $1 from the late bid Wednesday.

Mexico’s cut in oil prices, which lowered inflationary pressures, also hurt gold, a typical haven for funds against inflation.

As the trading session began in Tokyo, the dollar fell to a seven-month low of 242.95 yen from 244.60 yen Wednesday. Later in London, however, the dollar recovered to 243.58 yen, and by the end of the trading day in the United States, the dollar had settled at 243.10 yen, against 243.975 late Wednesday.

Foreign exchange dealers said currency markets appeared divided between those who predicted the dollar would gather strength and others who believed its decline would continue.

Traders said they were awaiting further evidence on the course of the economy and interest rates in the United States.

The pound, hurt by predictions of falling British interest rates, slipped to $1.3820 in London from $1.3842 Wednesday. Later in New York, sterling fell further, dropping to $1.3745 from $1.3795 late Wednesday.

Other late dollar rates in Europe, compared to late rates Wednesday, included: 2.9410 West German marks, up from 2.9395; 2.45825 Swiss francs, up from 2.4435; 8.9450 French francs, up from 8.9150; 3.3140 Dutch guilders, up from 3.3065; 1,894.00 Italian lire, up from 1,883.00, and 1.3540 Canadian dollars, up from 1.3520.

Dollar rates in New York, compared to late rates Wednesday, included: 2.9250 West German marks, down from 2.93925; 2.4350 Swiss francs, down from 2.4480; 8.8950 French francs, down from 8.9350, and 1.3554 Canadian dollars, up from 1.35455.

Gold began the trading day by nudging up 22 cents in Hong Kong to a closing bid of $314.56 an ounce. In Europe, gold slipped 85 cents in London to a late bid of $314.40 an ounce, and gold dropped $1.75 in Zurich to $313.50 an ounce. On the New York Commodity Exchange, gold bullion for current delivery fell $1.10 to close at $314 an ounce.

Silver fell to a late bid of $6.01 an ounce in London from $6.065 Wednesday. Later on New York’s Comex, silver bullion for current delivery fell 7.2 cents to close at $6 an ounce.