Dollar Edges Lower in Volatile Trading

The dollar edged lower in thin but volatile trading Wednesday, pushed down by profit-taking and technical factors.

Gold prices were mixed, falling in Europe and edging higher in the United States.

On Wednesday, the dollar bounced around within a narrow range, rising in early European trading before getting downward pressure late in the European session on unconfirmed rumors of an impending realignment of the European Monetary System.

Traders said the rumors indicated the realignment of the nine-nation EMS’ exchange rate mechanism could revalue the West German mark upward this weekend by as much as 5%. The speculation prompted heavy selling of the dollar in favor of the mark, erasing the dollar’s early gains.

“It tends to happen this time of year every year,” said Mark Fitzsimmons, a vice president and trader for Chemical New York Capital Markets.