Dollar Down in Quiet Trading; Gold Mixed

The dollar was lower in quiet mid-session trading Thursday after a modest improvement in the much-anticipated March U.S. trade figures failed to impress the market, dealers said.

Gold prices were mixed.

The $13.6 billion deficit narrowed the $15.1 billion gap reported in February and was squarely within the range of private economists’ forecasts. But it failed to match some traders’ expectations of a deficit as low as $10 billion to $12 billion.

The dollar fell to 1.7865 marks and 139.46 yen from Wednesday’s closes of 1.7945 and 140.35.

Currency dealers who had expected Thursday’s trade figures to give the market some direction were uniformly disappointed, and midsession trading was quiet and directionless.

“The trade figures were smack in the middle of a wide range of expectations and were no surprise,” one trader said.

“The numbers were not that bad but the market was expecting better ones. People were very disappointed,” added a trader at a major U.S. bank.

The decrease in the March trade gap continued a gradual narrowing trend that began in the third quarter of 1986, but disappointment that the deficit failed to narrow even further sent a bearish signal through the markets, dealers said.

The dollar also continued to lose ground against the British pound, which has been buoyed by opinion polls that give the ruling Conservative party in Britain a commanding lead going into the June 11 general election.

Sterling rose to 1.6780 against the dollar from 1.6695 Wednesday and held firm just below three marks.

Trading in gold was light as bullion dealers also waited to analyze the U.S. trade figures.

Gold fell in London to a late bid of $460.00 an ounce, compared to late Wednesday’s $462.00. In Zurich, gold rose to a bid of $461.00 compared to $460.50 late Wednesday.

Earlier in Hong Kong, gold fell 69 cents to close at a bid of $457.08.

Silver bullion prices rose on the London market.