CURRENCY : Sterling Continues Strong Streak

The dollar continued to slide Tuesday as the British pound again soared and other major currencies took their cues from sterling.

Gold prices were mixed. Republic National Bank of New York quoted a bid price of $435.70 for an ounce of gold as of 4 p.m. EST, down from $436.80 late Monday.

Analysts said the British currency was buoyed by high interest rates and the strength of the country’s economy.

Prime Minister Margaret Thatcher ruled out an early cut in interest rates, giving the pound a further boost Tuesday. She told Parliament that a drop in rates “would not be in the interest of inflation at the present time.”

Robert Ryan, a senior currency trader at Irving Trust Co., said “interest rates across the board seem to be ruling the markets right now,” with the currencies of countries with higher yields--such as the pound--turning in the best performances.

Sterling rose to $1.8415 from $1.8135 late Monday in London. In later New York trading, the pound rose to $1.8425 from $1.8180 late Monday. The pound has gained nearly 7 cents against the dollar in two days.

Economy Healthy

The dollar also continued under pressure because of signals that the U.S. economy is strong, analysts said.

Last Friday’s Labor Department report that the unemployment rate fell to 5.7% in January convinced traders that the economy is healthier than had been expected.

The market believed that the economy “could maintain demand for stronger imports and keep the U.S. trade deficit wide,” said Gary Dorsch, a market analyst with LNS Financial Group in Chicago.

Dorsch predicted that the dollar could fall toward 165 West German marks before there is central bank intervention to support the U.S. currency.

The dollar traded at 1.6668 marks in Europe, down from 1.6765 late Monday. In New York, the dollar was quoted at 1.6673 marks, down from 1.6771.

In Tokyo, the dollar fell to a closing of 127.80 Japanese yen from 128.87 yen. Later, in London, the dollar edged back up to 128.10 yen, and in New York, it rose to 127.93 yen from 127.835 yen.

Dorsch said the yen was down largely because of technical factors.

Other late dollar rates in Europe, compared to late Monday’s rates, included: 1.6668 West German marks, down from 1.6765; 1.3790 Swiss francs, down from 1.3870; 5.6625 French francs, down from 5.6880; 1.8780 Dutch guilders, down from 1.8840; 1,234.00 Italian lire, down from 1,239.75; and 1.2524 Canadian dollars, down from 1.2562.

Gold fell on New York’s Commodity Exchange to $435.30 an ounce from $437.30 late Monday.

But gold rose in Europe in response to the dollar’s weakness, bullion dealers said.

In London, gold increased to a late bid price of $438.10 from $437.20. Gold rose in Zurich, Switzerland, to $436.50 from $436.

Earlier, in Hong Kong, gold dropped to a closing bid of $438 from $438.75.

Silver prices fell in New York and London. On the Commodity Exchange, silver slipped to $6.310 an ounce from $6.395 late Monday. In London, silver fell to $6.36 from $6.42.

Tables, Page 17