Foreign Exchange for Thursday, Feb. 13, 1986 : Dollar and Gold Prices Drop Sharply

The dollar declined against major currencies Thursday, tumbling toward 180 yen for the first time since 1978, because of a selling wave by Japanese dealers and fresh expectations that U.S. interest rates will drop.

Gold prices also fell sharply in trading dominated by professionals.

Republic National Bank of New York said gold was bid at $332.50 an ounce as of 4 p.m. EST, down $5 from late Wednesday.

Currency analysts said the dollar came under heavy pressure in Tokyo after the Bank of Japan failed to buy dollars in the open market to support the U.S. currency at the 190-yen level, where Japanese finance officials have said they would like to see the dollar stay.

Analysts said traders sold off dollars because of expectations of lower U.S. interest rates, as indicated by strong demand for long-term U.S. Treasury bonds.