CURRENCY : Dollar Declines in Narrow Trading; Gold Ends Mixed

The dollar fell marginally against most key currencies Tuesday, reflecting what dealers called a narrow trading range that has emerged over the past several days.

Gold prices rose overseas but were mixed in the United States. As of 4 p.m. EST, Republic National Bank of New York quoted gold at $430.45 an ounce, down 15 cents from late Monday.

Currency dealers said there was little news to influence the behavior of the dollar. They said a Commerce Department report on the index of leading indicators, an important economic barometer, failed to convey a definite trend.

The department said the index fell 0.6% in January but it revised the December figure from a 0.2% drop to a 0.3% increase. That revision snapped a string of three straight monthly declines, which has often signaled an impending recession.

Effect of Interest Rates

“We need something more specific to set the market one way or another,” said Zlatko Glamuzina, chief currency dealer at the New York branch of the Italian bank Banco di Sicilia.

“There appears to be very little impetus for traders to move out of the dollar’s range, at least in the near term, “ said Gary Dorsch, senior money market economist at LNS Financial Group Inc. in Chicago.

By contrast, he said, currencies such as the British pound and Canadian dollar seemed to be appreciating because of relatively high interest rates in Britain and Canada.

The dollar rose in Tokyo, closing at 128.63 Japanese yen, up from 128.12 yen on Monday. Later in London, the dollar was lower at 128.30 yen. By the time trading concluded in New York, the dollar was trading at 128.32 yen, marginally higher than the 128.24 rate late Monday.

Pound Moves Higher

The British pound rose to $1.7775 from $1.7725 on the London market. Later in New York, sterling was quoted at $1.7766, more than the $1.7742 quoted late Monday.

Other late dollar rates in New York, compared to late Monday, included: 1.6864 West German marks, down from 1.6874; 1.3916 Swiss francs, down from 1.3931; 1.2578 Canadian dollars, down from 1.2592; 5.7100 French francs, down from 5.7155, and 1,243.25 Italian lire, up from 1,243.

Gold rose in London to a late bid price of $428.70 an ounce from $425 late Monday. In Zurich, Switzerland, gold rose to $429.50 from $426.

On the New York Commodity Exchange, gold for current delivery rose 50 cents to $431.

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