CURRENCY : Dollar Falls Despite Nudge by Greenspan

Associated Press

The dollar was mostly lower after a session of choppy trading Tuesday.

Gold prices also fell. Republic National Bank of New York quoted a late bid price for gold of $441.50 an ounce, down $2.75 from Monday's late bid.

Analysts said the dollar gained some strength from reports of congressional testimony by Federal Reserve Board Chairman Alan S. Greenspan early in the session, reversing overnight losses.

John Lynam, an analyst at Security Pacific National Bank, said traders were encouraged by Greenspan's statement that he saw no signs of a recession.

Other analysts in Europe and the United States cited his comment that the U.S. money supply might grow at a faster pace this year.

That spawned speculation that the Fed might have to encourage higher interest rates to slow excessive money growth--which would stimulate inflation.

In turn, higher rates would make dollar-denominated investments more attractive, boosting demand for the U.S. currency.

In the end, however, the dollar wound up mostly lower in trading described as choppy.

Lynam said the market continued to be dominated by "charts and technicals," making people "less willing to hold on to their positions."

"The whole problem is that this has become a one-release market: the trade numbers, everyone focuses on that," said Jim Chorek, an analyst at the Chicago office of Market Services Inc., an investment firm.

"And after that, volume is just dead," he continued. "So the market becomes keyed off of technicals."

In London, the British pound rose to $1.7655 from $1.7630 late Monday. In New York, the pound stood at $1.7633, more expensive than Monday's late price of $1.7593.

In Tokyo, the dollar fell to a closing 128.50 Japanese yen from 129.95 yen at Monday's close. In London trading later Tuesday, it edged up to 128.75 yen. In New York, it stood at 129.00 yen late in the day, down from Monday's 129.38 yen.

Other late dollar rates in New York, compared to late Monday, were: 1.6948 West German marks, down from 1.6979; 1.3933 Swiss francs, up from 1.3928; 1.2677 Canadian dollars, down from 1.2723; 5.7330 French francs, down from 5.7400, and 1,248.50 Italian lire, down from 1,249.50.

Other late dollar rates in Europe, compared with late Monday, were: 1.6945 West German marks, down from 1.6955; 1.3895 Swiss francs, down from 1.3930; 5.7240 French francs, down from 5.7500; 1.9000 Dutch guilders, down from 1.9040; 1,246.60 Italian lire, down from 1,252.25, and 1.2712 Canadian dollars, down from 1.2738.

Gold bullion prices slumped everywhere.

At the Commodity Exchange in New York, gold fell to $441.80 an ounce, down $3.80 from Monday's $444.90.

In London, the metal fell to a late bid of $442.50 an ounce from $446 bid late Monday.

In Zurich, Switzerland, it dropped to $442 bid from $446.50 bid late Monday.

Earlier, gold fell in Hong Kong to a closing bid of $446.80, down from $447.12.

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