Dollar Opens Lower; Gold Higher in Europe

The dollar opened lower against all major hard currencies on foreign exchanges today, following an earlier drop on U.S. and Japanese markets. Gold rose.

The dollar’s latest fall remained in line with a September decision by the leading Western industrial powers to depress the U.S. currency and ease the American trade deficit.

In Tokyo, where the yen is being watched as a leading indicator of the dollar’s performance, Bank of Japan governor Satoshi Sumita indicated that the central bank would continue intervening in money markets and keeping Japanese interest rates high to hold the yen up against the dollar.

Achieved Success

He said the Western powers had achieved considerable success in lowering the dollar, “but this doesn’t mean that we are satisfied with the situation we find today.”

In Tokyo, where trading ends before Europe’s business day begins, the dollar fell to a closing 205.05 yen from Tuesday’s 205.75. Later, in London, it was quoted at 204.58 yen.

Other dollar rates at mid-morning, compared to late rates Tuesday, were: 2.6125 West German marks, down from 2.6250; 2.1423 Swiss francs, down from 2.1572; 7.9615 French francs, down from 8.0025; 2.9447 Dutch guilders, down from 2.9600; 1,763.50 Italian lire, down from 1,772.25, and 1.3787 Canadian dollars, down from 1.3785.

In London, the British pound strengthened to $1.4185, compared to $1.4160 on Tuesday.

Gold opened higher in Europe, reacting to lower dollar prices, dealers said. But trading was quiet, and a London dealer predicted it would remain so until there was “substantial change in world money markets.”

Gold Edges Up

Gold opened in London at a bid price of $324.30 an ounce, compared to late Tuesday’s 323.50.