Dollar Slumps in Late Trading; Gold Prices Rise

The dollar finished lower against major foreign currencies in European trading Monday after reported intervention by the Bank of Japan to support the dollar failed to stem a major selloff of the currency.

Gold prices rose as the dollar fell.

The dollar was boosted at the opening of Asian trading by reports that the Japanese central bank had bought dollars and was in contact with the U.S. Federal Reserve to plan coordinated interventions for the dollar.

But dealers said the U.S. currency slumped by late afternoon trading in Europe after it became clear that the dollar wasn’t likely to rise further.

The dollar’s decline was kept orderly by fears of central bank intervention, dealers said. However, there was no solid evidence that central banks were buying or selling dollars in the market, they added.

“The bearish trend (towards the dollar) is still there,” one dealer said. The currency is likely to soften in the absence of any news to support it, traders said.

In Tokyo, where trading ends before Europe’s business day begins, the dollar fell for the sixth consecutive day to a closing 142.65 yen from Friday’s 143.00. Later in London, it was quoted at 141.95 yen.

Other late dollar rates Monday, compared with late Friday’s rates: 1.8160 West German marks, down from 1.8195; 1.4962 Swiss francs, down from 1.5050; 6.0745 French francs, down from 6.0880; 2.0460 Dutch guilders, down from 2.0505; 1,314.50 Italian lire, down from 1,319.00; 1.32125 Canadian dollars, down from 1.32625.

In London, the dollar fell against the British pound. It cost $1.6335 to buy one pound, more expensive than the $1.6285 it cost late Friday.

Gold prices rose on the dollar’s weakness.

In London, the precious metal was quoted at a late bid price of $459.25 an ounce, up from $454.50 Friday.

Gold closed in Zurich at a bid of $460.50, up $5 from Friday.

Earlier in Hong Kong gold closed at a bid $456.53, down from $457.60 Saturday.

Silver was quoted in London Monday at a late bid price of $7.83 an ounce, up from Friday’s $7.58.