Foreign Exchange for Thursday, Jan. 9, 1986 : Dollar Steadies After Drop in Europe

The dollar stabilized in heavy U.S. trading Thursday after plunging in Europe on rumors that the Arab nations were heeding a call from Libya to sell dollars and take their money out of the United States. Gold prices did the reverse--soaring then settling.

Bullion was quoted at $337.25 an ounce at Republic National Bank at 4 p.m. EST, up $4.25 from Wednesday’s late bid.

By day’s end, traders generally discounted that any real selling indeed had already taken place out of the Middle East.

Libya’s foreign minister, Ali Abdussalam Treiki, said Libya wants the Moslem world to boycott American goods.

“It was a busy day, real busy,” said James McGroarty, a vice president of Discount Corp. in New York.

“The dollar started out on a very firm note. I guess a carryover from yesterday on the economy doing well with the employment numbers and everything,” McGroarty said. The rampant rumors that dollars were being sold off rocked the metals and stock markets too, he said.