CURRENCY : Dollar Lower in Narrow Trading

The dollar finished lower Wednesday in dull domestic dealings, failing to react to the government’s latest economic data.

Gold prices rose. Republic National Bank of New York quoted a bid price for gold of $451.15 an ounce as of 4 p.m. EST, up from Tuesday’s late bid of $448.65.

Traders said there was little activity throughout the session, and the dollar moved in a very narrow range.

The currency had little reaction to a Labor Department report showing a 0.2% rise in consumer prices during February. “As long as inflation is not a problem,” the dollar is undaunted by the figures, said Curtis Perkins, a foreign exchange dealer with Chemical New York Capital Markets Group.

The market showed no interest in a revision of the gross national product for the fourth quarter. The Commerce Department said the economy expanded at a 4.8% annual rate, up from the 4.5% growth figure it reported a month ago.

Traders said investors are in a holding pattern until the end of the Japanese fiscal year on March 31.

Less Interested in Dollar

“There are rumors that the Japanese are trying to keep the yen weak until the end of the year,” said David Godwin, chief foreign exchange manager at Union Bank of Switzerland.

Godwin noted that investors “are looking at the European economies against the Asian economies” when making foreign exchange trades and are less interested in the dollar at the moment.

Similarly in European trading, the dollar stumbled in the sidelines as the British pound dominated foreign exchange trading. Sterling rose above 3.11 marks several times during the trading session, but fears of intervention took it back down each time.

In Tokyo, the dollar closed at 127.15 yen, up 0.08 yen from Tuesday’s close. But later, in London, it was quoted at a lower rate of 126.83 yen. In New York, the dollar closed at 126.85 yen, down from 127.025 yen on Tuesday.

In London, the pound rose against the dollar to $1.8358, from Tuesday’s $1.8300. In New York it cost $1.83725 to buy one pound, more expensive than Tuesday’s $1.8330.

Other late dollar rates in New York, compared to Tuesday, included: 1.6916 West German marks, down from 1.69175; 1.3985 Swiss francs, down from 1.39895; 5.7470 French francs, down from 5.7500; 1,251.875 Italian lire, down from 1,252.825, and 1.2430 Canadian dollars, down from 1.24575.

Gold Higher

Other late dollar rates in Europe, compared to late Tuesday, included: 1.6915 West German marks, down from 1.6935; 1.3990 Swiss francs, down from 1.4015; 5.7450 French francs, down from 5.7540; 1.9005 Dutch guilders, down from 1.9015; 1,253.25 Italian lire, unchanged, and 1.2434 Canadian dollars, down from 1.2468.

Gold prices moved higher. On the New York Commodity Exchange, gold for current delivery closed at $451.10 an ounce.

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