Foreign Exchange : Dollar Drops Sharply Again

The dollar dropped again Wednesday against major currencies as the White House enflamed bearish sentiment with comments that it expected the dollar to fall further. Gold prices surged higher. Republic National Bank in New York quoted gold bullion at $417.50 an ounce, up $6.95 from Tuesday.

The dollar continued falling from the four- to seven-year lows it reached against several major currencies in the previous session, despite intervention by the Japanese central bank to support the dollar against the Japanese yen.

Typical of the dollar’s trading day was its performance against the yen. In Tokyo, where trading ends before Europe’s business day begins, the dollar fell to 153.80 yen from Tuesday’s 156.00 yen. The dollar traded later in London at 153.95 yen and in New York the dollar slumped to 152.80 yen from Tuesday’s 155.575 yen.

The dollar has been in a sustained decline since the year began, largely because of a weak outlook for the U.S. economy and a firming of world oil prices.