Dollar Off Against Most Currencies

The U.S. dollar tumbled against major foreign currencies except the Canadian dollar Thursday as traders renewed speculation that U.S. interest rates could move lower.

Gold prices were mixed. At 4 p.m. EDT, gold bullion was quoted at $341.50 an ounce at Republic National Bank, unchanged from Wednesday.

Fueling the dollar selloff were comments by Federal Reserve Board Chairman Paul Volcker to the effect that “people were misconstruing the idea that he was standing in the way of lower interest rates,” said Howard Kurz, chief trader at the Bank of America’s New York Trading Center.

Speaking before a House Banking subcommittee, Volcker warned that the end of the oil price decline might spark a new round of inflation, but denied he was trying to signal a tighter monetary policy. He also said that the United States would not necessarily wait for West Germany or other nations to move first before cutting the U.S. discount rate.