Dollar Spurts; Gold Advances Again
The dollar spurted against all major foreign currencies except the British pound in late trading Wednesday as the bond and stock markets collapsed.
Gold prices also were up, again. Bullion was quoted at $333 an ounce at Republic National Bank at 4 p.m. EST, up $2.50 from Tuesday’s late bid.
“The dollar is taking off here,’ said David Arbesman, a first vice president with Prudential-Bache Securities Inc. “It’s basically watching the bond market.”
As bond prices fall, interest rates rise. And higher interest rates make dollar-denominated investments more attractive.
Martin S. McAuley, a vice president for foreign exchange at Continental Illinois Bank & Trust Co. in Chicago, said: “It has moved. I guess it’s based on the kind of a sell-off in the bond market and the stock market doesn’t look so good either.”
The Dow Jones Average of 30 industrials, the stock market’s best-known indicator, plummeted 39.10 points to 1,526.61, the biggest one-day fall in Wall Street history.
