Foreign Exchange for Monday, Jan. 6, 1986 : Dollar Down; Gold Up Slightly

The U.S. dollar fell against all major currencies Monday, even as it continued flirting with a historic high against its Canadian counterpart. Gold prices rose.

The Canadian dollar’s weakness led the Canadian Imperial Bank of Commerce and the Toronto-Dominion Bank to raise their prime lending rates to 10.5% from 10%, effective Tuesday.

Douglas Peters, the Toronto-Dominion’s chief economist, said the exchange crisis had been precipitated by a “short-term speculative binge.” He predicted that if the Canadian dollar “behaves more reasonably,” the prime rate will go back down.

In Toronto, the Canadian dollar hit record lows against its U.S. counterpart during trading Friday and Monday, but closed above those levels on both days.

James McGroarty, a trader at the Discount Corporation of New York, said the U.S. currency’s last high against the Canadian dollar in U.S. trading was $1.4110 set in February last year.