Dollar Drops in Japan and Europe

The U.S. dollar plunged today to a 4 1/2-year low against the Japanese yen and to its lowest level in more than a year against most major European currencies.

Gold and silver bullion rose in active trading.

Currency traders in Frankfurt, West Germany, said the dollar was under pressure in advance of Saturday’s meeting of senior Western finance officials in Seoul, South Korea.

In Tokyo, the dollar slid to 211.90 yen, down from 213.30 yen on Thursday and its lowest level since the spring of 1981. Later in London, the U.S. currency was quoted at 212.20 yen.

In European trading, the dollar hit its lowest levels since the summer and spring of 1984 against the West German, Swiss, French, Dutch and Italian currencies.

The dollar also fell, but less sharply, against the British and Canadian units.

Mid-morning dollar rates compared to levels in Europe late Thursday included: 2.6080 West German marks, down from 2.6270; 2.1230 Swiss francs, down from 2.1563; 7.9715 French francs, down from 8.0575; 2.93675 Dutch guilders, down from 2.9730; 1,761.50 Italian lire, down from 1,780, and 1.36475 Canadian dollars, down from 1.3687.

The value of the British pound rose to $1.433 from $1.4222.

Gold bullion, meanwhile, opened strong in Europe and continued to edge upward in what one dealer described as “quite hectic and busy” trading.

London’s five biggest bullion houses fixed a recommended gold price today of $330.55 an ounce, up from $328.50 late Friday.

Gold was bid at $330.75 in Zurich, up from $325.20. Earlier in Hong Kong, the metal gained $6.31 to close at a bid of $331.40.