Foreign Exchange : British Pound Eases Against Dollar

The British pound eased slightly against the dollar on foreign exchange markets Thursday, but stayed above $1.60, while the dollar drifted narrowly lower against all other currencies in quiet trading. Gold prices were mixed. Republic National Bank in New York quoted gold at $405.50 an ounce, up from $405 late Wednesday.

Dealers said the pound was slightly off on profit taking and concern that the British government might intervene to keep the currency from rising too much.

Traders have been bullish on the pound in recent days partly because of Britain’s 1988 budget proposal, which calls for tax cuts and reduced government borrowing, and relatively high interest rates.

In London, the pound closed at $1.6010, after trading at $1.6075 Wednesday, its highest level in Europe in about four years. Sterling fetched $1.6010 in New York, down from $1.60795.

The dollar fluctuated within a narrow range throughout the day, generally posting modest losses.