Foreign Exchange for Friday, Aug. 22, 1986 : Dollar Is Mostly Higher; Gold Down

The dollar gained ground against most major foreign currencies on Friday as U.S. interest rates rose slightly in response good economic news.

Gold fell in the United States after a mixed performance in Europe. Republic National Bank in New York quoted gold bullion as of 4 p.m. EDT at $374.25 an ounce, down $10 from Thursday’s close.

The dollar was bolstered partly by higher interest rates in the bond market following the Commerce Department’s report that durable goods orders rose 4.3% in July, the biggest gain since 1984.

Although most economists believe that the U.S. economy remains sluggish, the report was seen as a sign of a possible economic revival.

But dollar gains were slight and occurred in relatively quiet markets, analysts said, mirroring the continued bearish sentiment on the currency.

“You would have thought the market would have been excited about it,” said Ross Taylor, a trader for Prudential-Bache Securities. “The currency markets remain convinced the dollar’s running lower, despite whatever short term reversals.”