Foreign Exchange : Dollar Falls Against Most Currencies

The dollar fell against most major currencies in erratic trading Wednesday. Gold prices rose.

The pound was off slightly. Brisk activity in sterling led to speculation that the British central bank was stepping in to support the currency.

James McGroarty, vice president of the Discount Corporation of New York, joined European dealers in suggesting that trading activity was influenced by uncertainty over foreign demand for $21.75 billion in U.S. Treasury securities being auctioned this week.

Though dollar activity was “pretty quiet,” McGroarty said “sterling was pretty active.”

“People are looking at a perception that oil prices are under some pressure, and there is a feeling that U.K. interest rates are about to break,” McGroarty said.

At the same time, he said “there seems to be some evidence” that the Bank of England is stepping in to back the pound “because of support of sterling at around $1.34 or $1.33.”