Dollar Slides Further; Price of Gold Drops

The dollar continued sliding lower today against key European currencies, weakened by further dampening of expectations for a currency stabilization move by major industrial nations.

Gold bullion prices fell.

Foreign exchange dealers said the dollar came under renewed pressure in hectic trading when U.S. Treasury Secretary James A. Baker III cautioned against speculation that the big five Western industrial powers would meet soon to try to stabilize currency markets.

Of little help were Baker’s remarks to a congressional committee that indicated a further fall of the dollar against the Japanese yen might not be desirable. A weaker dollar makes imports relatively more expensive, thus making U.S. goods more competitive at home and overseas.

The dollar is hovering near its lowest point against the yen since the late 1940s, hitting hard at Japan’s export industries.

The dollar closed in Tokyo at 152.95 Japanese yen, down from 154.45 yen at Monday’s close. Later in London, the dollar traded at 153 yen.

On Monday, the dollar fell sharply after Baker said there would be no meeting soon of the so-called Group of Five--the United States, Japan, Britain, France and West Germany. Speculation had grown in recent weeks that the group would meet to discuss dollar stabilization.

In London, the British pound rose for the third straight trading day to $1.5325, from $1.5165 late Monday.

Other late dollar rates in Europe, compared to late Monday’s rates, included: 1.7965 West German marks, down from 1.8290; 1.5280 Swiss francs, down from 1.5407; 6.0350 French francs, down from 6.0975; 2.0465 Dutch guilders, down from 2.0640; 1,292.375 Italian lire, down from 1,300.50, and 1.3344 Canadian dollars, up from 1.3337.

Gold also fell sharply, depressed mainly by profit taking, bullion dealers said.

In London, gold fell to a late bid of $402.70 an ounce, down from $405.85 late Monday. In Zurich, gold fell to a bid of $402.50 from $405.50 late Monday.

Earlier in Hong Kong, gold closed at a bid of $405.82, up from $403.74 on Monday.