Dollar Rises in European Trading; Gold Rebounds

The U.S. dollar turned higher against all major currencies except the Canadian dollar in European trading on Wednesday. Gold prices also rose, partly recovering from the previous day’s decline.

Currency dealers said that despite the dollar’s firmness the market lacked direction. “It was a wait-and-see day,” said one London dealer.

Dealers attributed the dollar’s improvement largely to favorable U.S. economic reports.

The Commerce Department said Tuesday that its main index of future U.S. economic activity rose a hefty 2.1% in December, although the improvement was due mainly to one-time factors.

In London, the dollar edged up against the British pound. It cost $1.5235 to buy one pound, cheaper than $1.5265 Tuesday.

Other dollar rates in Europe, compared with Tuesday: 1.8185 West German marks, up from 1.7875; 1.5355 Swiss francs, up from 1.5095; 6.0625 French francs, up from 5.9700; 2.0525 Dutch guilders, up from 2.0185; 1,293.25 Italian lire, up from 1,275.50; and 1.3265 Canadian dollars, down from 1.3328.

Earlier, the dollar closed in Tokyo at 152.40 Japanese yen, compared with Tuesday’s close of 152.28 yen. In London, the U.S. closed at 152.90 yen.

Gold rose in London to a late bid price of $403.25 an ounce, compared with late Tuesday’s $400.40, but still down on Monday’s closing $407.50.

In Zurich, gold was also higher, closing at a bid $404.50 an ounce, compared with $401.50 late Tuesday.