Foreign Exchange for Tuesday, Oct. 21, 1986 : Dollar Retreats in U.S.; Gold Drops

The dollar, which rose earlier in Europe, retreated against major foreign currencies in the United States on Tuesday as interest rates softened.

Trading was quiet. Traders were awaiting the Commerce Department’s latest report on the U.S. gross national product, which was scheduled to be released today.

Gold bullion fell back, too, after gaining nearly $5 earlier in Hong Kong. Bullion was quoted at $425 an ounce at Republic National Bank in New York, down $1 from Monday’s bid. Currency traders in Europe said the dollar was still being underpinned by remarks Monday by Karl Otto Poehl, president of West Germany’s central Bundesbank, who signaled a willingness to intervene in support of the dollar. Poehl said at a London business meeting that he felt the dollar’s decline had gone far enough.

Later, Earl Johnson, a trader at Harris Trust & Savings Bank in Chicago, said: “That (factor) seems to have eased here now.”