CURRENCY : Dollar Falls; Gold Is Lowest Since April
The dollar slipped Friday against most major currencies in quiet trading on the world’s foreign exchange markets.
Gold prices resumed their recent decline in New York, falling to their lowest level since April, 1987, in moderate volume. Republic National Bank of New York quoted a late bid price for gold of $429.50 an ounce, down from $433 late Thursday.
The dollar slipped in Asia and Europe, reflecting lingering disappointment over Thursday’s report that the U.S. economy expanded at a 4.5% pace in the fourth quarter when some traders had expected a 5% rise.
But dealers in Europe said expectations that central banks might intervene to support the dollar prevented it from falling even lower.
John Hazelton, a vice president for institutional sales at Manufacturers Hanover Trust Co., said the dollar traded in a very narrow range in the United States with professional traders accounting for the bulk of the activity.
“They are about the only ones involved in the market,” he said. “There has been very little corporate or institutional business. It’s mostly traders in the various banks.”
In a Quiet Period
He said the market shrugged off the latest government reports on the U.S. economy, which said Friday that personal income, consumer prices and consumer spending each rose 0.3% in January. The increases were within expectations.
“We are in a quiet period for the currencies,” Hazelton said.
In Tokyo, the dollar fell to 128.35 Japanese yen from 128.80 yen on Thursday. Later in London, the dollar fell to 128.24 yen. In New York, the dollar edged down to 128.37 yen from 128.425 yen.
In London, the British pound rose to $1.7715 from $1.7665 late Thursday. In New York, the pound rose to $1.7715 from $1.76725.
Other late dollar rates in New York, compared to late rates Thursday, included: 1.68875 West German marks, down from 1.6930; 1.38625 Swiss francs, down from 1.39215; 5.71700 French francs, down from 5.7285; 1,245 Italian lire, down from 1,247, and 1.2634 Canadian dollars, down from 1.26495.
Other late dollar rates in Europe, compared to late rates Thursday, included: 1.6895 West German marks, down from 1.6945; 1.3897 Swiss francs, down from 1.3935; 5.7175 French francs, down from 5.7315; 1.8965 Dutch guilders, down from 1.9020; 1,245.45 Italian lire, down from 1,248.25, and 1.2838 Canadian dollars, up from 1.2650.
Bullion Declines
Gold prices have slumped this week as worries about inflation have receded and supplies of the metal have grown.
On New York’s Commodity Exchange, gold for current delivery fell $3.60 an ounce to $429.60, its lowest level since April 8 when it closed at $420.20.
The exchange said contracts for about 3 million ounces of gold were traded, which an exchange spokesman described as moderate volume.
Earlier, gold closed in both Zurich, Switzerland, and London at $431.50, up from $428 bid late Thursday in London but down from $433 in Zurich.
In Hong Kong, gold rose to $437.23 from $436.35.
Silver bullion rose in London to $6.20 an ounce, up from $6.15 late Thursday. On New York’s Comex, silver for current delivery fell 9 cents to $6.155, its lowest level since March 26 when it closed at $5.92.
