Dollar Rises on Hopes for Steps to Brake Skid

The dollar strengthened Tuesday as speculation grew that the United States, Japan and West Germany might cooperate to halt the dollar’s decline.

The dollar’s performance sent gold tumbling more than $14 an ounce. Republic National Bank of New York quoted gold at $407 an ounce as of 4 p.m. EST, compared to $421.75 late Monday.

Foreign-exchange traders said the dollar rose because of a scheduled meeting today between Treasury Secretary James A. Baker III and Japanese Finance Minister Kiichi Miyazawa, who made an emergency trip to Washington because of the dollar’s rapid deterioration over the past few weeks.

Traders also said the dollar was helped by reports from West Germany that the government might cut domestic interest rates, possibly by the weekend, in response to pressure from the United States.

Both developments indicated to many traders that they should buy dollars or at least stop selling them.

In Tokyo, the dollar recovered from its lowest level since the late 1940s, closing at 152.25 yen, compared to 150.45 yen on Monday. Later in London, the dollar was fractionally higher at 152.30 yen. By the time trading ended in New York, the dollar was quoted at 152.60 yen, slightly higher than the 152.40 yen quoted Monday.

The British pound fell nearly 2 cents in London, to $1.5195 from $1.5370. Later in New York, the pound slipped to $1.5185, down from $1.5245 on Monday.

Other late dollar rates in New York, compared to late Monday included: 1.8375 West German marks, up from 1.8310; 1.5420 Swiss francs, up from 1.5280; 1.3582 Canadian dollars, down from 1.3608; 6.1370 French francs, up from 6.1075, and 1,307.00 Italian lire, up from 1,287.75.