Foreign Exchange for Friday Oct. 10, 1986 : Dollar Sinks; Gold Prices Mixed

The dollar sank Friday after a West German central banker said his country does not intend to reverse the U.S. currency’s downward trend.

Gold prices were mixed. At the Republic National Bank in New York, gold was quoted at $430.75 an ounce up $1.

Soon after trading began in the United States, it was reported that Claus Koehler, a director of the West German central bank, said the Bundesbank’s recent dollar purchases on the open market were aimed at slowing the dollar’s decline rather than changing its fundamental direction.

The dollar, for the most part, has been declining against other key currencies.

Koehler’s remarks, carried by the West German VWD economic news service, stunned the markets and sent the dollar tumbling, currency dealers said.

Meanwhile, gold bullion traded below $430 an ounce for most of the European day, but jumped back over the barrier in response to the dollar’s late decline. However, it remained below levels of late Thursday.