Foreign Exchange for Thursday, June 12, 1986 : Dollar Lower Against Most Currencies
The dollar drifted lower against most major currencies Thursday after reports of sluggish U.S. economic activity caused speculation that U.S. interest rates might decline.
Gold prices fell. At Republic National Bank in New York, gold was quoted at $346.50 an ounce as of 4 p.m., down $1.50 from Wednesday’s late bid.
A Commerce Department report that retail sales dipped 0.1% in May suggested that consumer spending, which accounts for two-thirds of total economic activity, remains mediocre, analysts said.
A separate department report showing that businesses plan to curb investments this year also undermined the dollar.
“The market is very bearish toward the dollar because of the weak economic numbers that have come out and lingering concerns over Mexico’s debt situation,” said John Lynam, a vice president at the New York office of Security Pacific Bank.
Currency dealers have been concerned that Mexico’s credit crunch could cause problems for U.S. banks.