Foreign Exchange : Pound Hits 4-Year High Versus Dollar

The British pound held center stage on foreign exchange markets Wednesday, reaching a four-year high against the dollar in Europe, while the U.S. currency closed mostly higher in quiet trading.

Gold prices were mostly lower. Republic National Bank in New York quoted gold at $405 an ounce, down from $405.75 late Tuesday.

The dollar strengthened narrowly against most key currencies worldwide as traders shrugged off a revised government report showing U.S. economic growth, as measured by the nation’s gross national product, slumped to a meager 1.1% annual growth in the 1986 fourth quarter.

Traders said the dollar has been holding fairly steady due to a fear of possible central bank intervention following a February agreement in Paris among major industrialized nations to stabilize currencies.

“The dollar wasn’t doing very much of anything,” said Joseph Cally, a currency trader for Prudential Bache Securities Inc.