Dollar Drops in Light Trading

The dollar fell Tuesday in light trading, which traders attributed to a belief that the currency was overvalued following its strong recovery from a slump late last week.

Gold prices rose in reaction to the dollar’s fall. Republic National Bank quoted gold at $458.75 an ounce at 4 p.m. EDT, compared to $456.50 late Monday.

Foreign exchange brokers said there was a feeling that the dollar’s value was too high in relation to the West German mark and Japanese yen, the two most important comparative currencies. They said trading was slow because of little significant news and a holiday in Japan, where markets were closed.

In New York, the dollar fell to 143.57 Japanese yen compared to 144.47 yen late Monday.

The British pound gained in London, closing at $1.6430 compared to $1.6345 late Monday. In New York, the pound fetched $1.6768.