CREDIT : Bond Prices Follow Dollar, Finish Lower

Bond prices finished slightly lower Wednesday as they continued to follow the lead of the dollar.

The Treasury’s bellwether 30-year bond finished down 6/32 point, or nearly $2 for every $1,000 in face value. Its yield edged up to 8.76% from 8.75% on Tuesday.

Analysts said trading was relatively quiet in anticipation of the coming Passover and Easter holidays.

William V. Sullivan, director of money market research for Dean Witter Reynolds Inc., said bond prices followed the lead of the dollar for most of the day. The U.S. currency finished lower against most key currencies despite reports of central bank intervention.

The bond markets generally view declines in the dollar as an indication that inflation led by rising import prices could accelerate, a development that would erode the value of bonds.

In the secondary market for Treasury bonds, prices of short-term governments were unchanged; intermediate maturities fell 1/16 point, and 20-year issues fell 3/32 point, according to the financial information service Telerate Inc.

The movement of a point is equivalent to a change of $10 in the price of a $1,000 bond.

The Merrill Lynch daily Treasury index, which measures price movements on all outstanding Treasury issues with maturities of a year or longer, fell 0.17 to 111.57. The Shearson Lehman composite bond index, which makes a similar measurement, fell 0.27 to 1,168.76.

In corporate trading, industrials and utilities were unchanged in light trading, according to the investment firm of Salomon Bros.

In the tax-exempt market, the bond buyers municipal bond index, which measures prices on 40 long-term issues, was unchanged at 87 27/32 points while its yield edged up to 8.18% from 8.17%.

Yields on three-month Treasury bills fell 2 basis points to 5.72%. Six-month bills rose 2 basis points to 6.04%; one-year bills were unchanged at 6.36%. A basis point is one-hundredth of a percentage point.

The federal funds rate, the interest on overnight loans between banks, traded at 6.675%, up from 6.50% on Tuesday.