Interest Rate Hopes Provide Boost to Dollar

The dollar gained today against all key currencies in European trading amid expectations that U.S. interest rates would rise.

Gold prices edged up, but silver, hovering at a two-year high, retreated slightly.

Foreign exchange dealers said the dollar was boosted by prospects of higher interest rates and speculation that the Reagan Administration is considering issuing bonds in Japanese yen instead of dollars to finance its public-sector debt.

Dealers said they were awaiting the outcome of this week’s monetary talks in Washington among the finance officials of the United States, Japan, West Germany, France, Britain, Canada and Italy. The officials are expected to reaffirm an agreement they reached in February to stabilize the dollar.

In Tokyo, the dollar edged up to a closing 145.63 Japanese yen from Tuesday’s 145.25 yen, its lowest level since exchange-rate alterations in the late 1940s. Later, in London, it gained almost one yen to 146.60 yen. In London, the British pound fell to $1.6130 from $1.6180 late Tuesday.

Other late dollar rates in Europe, compared to late Tuesday, were: 1.8390 West German marks, up from 1.8260; 1.5260 Swiss francs, up from 1.5145; 6.1100 French francs, up from 6.0725; 2.0710 Dutch guilders, up from 2.0590; 1,308.50 Italian lire, up from 1,300.50, and 1.3074 Canadian dollars, up from 1.3070

In London, the metal rose to a late bid price of $422 an ounce, up from $419.50 late Tuesday. In Zurich, it rose to $420 from $419. Earlier, in Hong Kong, gold rose to a closing bid of $423.07 from $420.44.

Silver, which has gained more than $1 an ounce in the last three weeks, pushed up to $6.72 in early trading but then slipped back to a late bid of $6.62, down from $6.66.