Dollar Takes a Steep Drop

The U.S. dollar dipped sharply Friday in light trading in Europe as exchange markets reopened after a two-day Christmas break. Gold bullion prices rose.

In Frankfurt, West Germany, the dollar fell to its lowest level since May 20, 1983, ending at a late bid price of 2.4765 West German marks. In Milan, Italy, the dollar fell below 1,700 Italian lire for the first time since June 15, 1984. In Paris, it fell to 7.6075 French francs, its lowest level since June 27, 1983.

The dollar’s decline, prompted by corporate selling, was more marked because the market was unusually quiet, with dealers quoting unusually wide buying-selling margins, dealers said.

“Under normal market conditions, the dollar’s decline may not have been as steep,” said one Frankfurt dealer.

In London, the value of the British pound rose to $1.4350 from $1.4250 late Tuesday.

In Tokyo, where markets remained opened through the Christmas holidays, the dollar rose marginally to a closing 202.92 Japanese yen, up from Thursday’s close of 202.90 yen. Later, in London, the dollar fell to 202.40 yen.

Late dollar rates compared with late Tuesday, the last day of trading, were: 2.4765 West German marks, down from 2.5060; 2.0915 Swiss francs, down from 2.1065; 7.6075 French francs, down from 7.6810; 2.7900 Dutch guilders, down from 2.8280; 1,691.00 Italian lire, down from 1,711.75, and 1.4005 Canadian dollars, up from 1.39425.

Gold prices rose in thin European trading, but was spurred by investors buying in U.S. markets rather than in Europe, bullion dealers said.

In London, gold rose to a late bid price of $326.70 an ounce, up from $325.00 bid late Tuesday.