Commodities Tuesday, August 18, 1987 : Financial Futures Rattled

From Associated Press

A sharply lower dollar sent reverberations through financial futures markets Tuesday, with bonds and stock indexes falling steeply and precious metals advancing.

On other markets, most livestock and meat futures declined sharply. Oil futures were mixed.

"The dollar was under significant pressure since overnight, with a lot of selling in the Japanese market," said Jack Barbanel, an analyst in New York with Gruntal & Co.

The selling continued when U.S. markets opened, "triggering a fairly good selloff in bonds, and that in turn precipitated the stock market decline," he said.

The weakness in the dollar, he said, is traceable back to Commerce Department data released Friday showing the U.S. trade deficit widened to an apparent record in June when the market was expecting a contraction.

"This may be the beginning of some retracement for the dollar" from recent gains, said Barbanel. He said the test may come in early September when many senior European banking officials return from vacations.

With the dollar so weak, it was surprising that precious metals were limited in their advances, said Barbanel.

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