Dollar Gains Against All Key Currencies but Pound

The dollar closed higher against all major currencies except the British pound in domestic trading Friday, following reported dollar buying by central banks in Japan and several European nations.

The dollar’s upturn followed a sharp decline Thursday, particularly against the Japanese yen and the West German mark.

Gold prices fell. Republic National Bank in New York at 4 p.m. EDT quoted gold bullion at $453.25 an ounce, down from $456 late Thursday.

Central bank intervention to support the dollar apparently began overnight in Tokyo, traders said, when the Bank of Japan’s dollar buying helped lift the currency from its lows of the previous session.

As trading moved to Europe, a number of central banks that had not intervened on the dollar’s behalf for some time--including central banks of West Germany, France and Switzerland --were believed to have stepped in to buy dollars.

The dollar closed mixed in European trading, and in the United States could not sustain the gains made in earlier foreign trading, analysts said.

However, some analysts said central bank intervention would provide only support for a weakening currency.

While intervention lifted the dollar from its lows of the previous session, “basic market sentiment hasn’t changed--the dollar is still for sale,” said John Caulfield, a senior vice president at Continental Illinois National Bank in Chicago.

Expecting ‘Lousy Number’

Caulfield and others also said bearish sentiment toward the dollar likely would continue when July trade figures were released next month.

“We’re expecting a lousy number,” said Robert Ryan, senior trader at Irving Trust Co. Ryan said traders were estimating that the deficit soared to between $16 billion and $16.5 billion in July.

Caulfield noted that a wider than expected June trade deficit figure of $15.7 billion, an apparent record, sparked the bearish tone now pervading the market. The July trade figure “is the next natural sign as to whether the June figure was an aberration” or part of a solid trend, Caulfield said.

In Tokyo, the dollar fell to 141.50 Japanese yen from 142.55 yen late Thursday. Later in London, the dollar traded at 142.35 yen. In New York, the dollar rose to 141.88 yen from 141.77 yen.

The British pound rose to $1.6300 in London from $1.6275. In New York, sterling rose to $1.6324 from $1.6305.