Dollar Gains in Europe; Gold Off in London

The U.S. dollar climbed sharply on European currency markets today, propelled by the falling British pound and reports that Japan may act to strengthen the dollar. Gold plunged by more than $5 in London and Zurich morning trading.

The pound, which lost nearly three cents Monday, was trading another 1.2 cents lower today as the price for Britain’s top-selling North Sea oil, Brent crude, fell to $16.40 a barrel, its lowest since 1979.

Sterling fell as low as $1.3695 against the dollar before steadying at $1.3730. Its trade-weighted value against other currencies was 73.0, down 0.5 from Monday to its lowest level in a year.

In London, the pound was quoted at $1.3735 at mid-morning, compared to $1.3855 on Monday.

A Frankfurt dealer said the In Tokyo, where trading ends before Europe’s business day begins, the dollar’s fall against the yen was arrested for the first time in eight days when it rose to a closing 191.35 yen. On Monday it fell to 189.85 yen, its lowest level in more than seven years.

The dollar had lost 11.58 yen in eight days before today’s upturn. Later, in London, it continued to climb to a mid-morning quote of 192.05 yen.

Gold opened in London at a bid of $343.95 an ounce, compared to late Monday’s $346.80.