The dollar traded erratically in a narrow range against major foreign currencies Wednesday as the market responded to a downward revision in a key U.S. economic gauge and to statements by Federal Reserve Board Chairman Paul Volcker.
Gold moved higher. Bullion was quoted at $338.10 an ounce at Republic National Bank, up $1.40 from Tuesday's bid.
The dollar, which opened higher on technical, speculative buying, weakened after the Commerce Department announced it had revised to 2.9% the previously reported 3.7% rate of growth in the gross national product in the first quarter.
Then the dollar was boosted by a statement from Volcker that in his view the United States isn't hovering on recession. Dealers also said they were encouraged by Volcker's comment that exchange rate changes alone cannot solve the U.S. trade and budget imbalances. Dealers took the remark as a warning against tackling such imbalances simply by further reducing the dollar's value.