CURRENCY : Dollar Feels Pressure, Closes Lower

The dollar headed lower Thursday in subdued, pre-holiday dealings.

Gold lost ground in domestic trading after rising overseas. Republic National Bank of New York said gold was bid at $454 an ounce as of 4 p.m. EST, down from $456.25 late Wednesday.

Traders said the dollar moved in a narrow range throughout the session, closing near its opening levels. Most of the pressure on the currency came earlier in overseas trading, said Stephen Dakin, foreign exchange manager at Union Bank of Switzerland.

The Japanese yen and the British pound remained very strong, which served to “drag the dollar down and push other (major) currencies up,” Dakin said.

Traders spent the session squaring up their positions ahead of the Easter and Passover holiday weekend. Many dealers did not plan to trade today, while others said they would work only half a day.

“You won’t see a real market back until Tuesday,” said Lou Calvello, a trader at Prudential-Bache Securities Inc., in reference to the four-day weekend European dealers are taking.

Sterling Strong

Trading also was thin in Europe, where the dollar fell to a six-year low against the pound.

The British currency continued to draw strength, dealers said, from comments by Chancellor of the Exchequer Nigel Lawson late Wednesday that fighting inflation takes priority over maintaining a stable exchange rate.

The Bank of England reportedly intervened briefly in the early going in an effort to stem the pound’s strong advance, but the currency continued to climb later in the afternoon.

In London, the dollar hit its lowest level against the pound since January, 1982. It cost $1.8878 to buy one pound, more expensive than $1.8790 late Wednesday. In New York, one pound cost $1.8874, more expensive than Wednesday’s $1.8780.

Earlier in Tokyo, where the business day ends as Europe’s begins, the dollar dropped against the Japanese yen to close at the day’s low of 124.50 yen, down 0.93 yen from Wednesday.

Later in London, the dollar fell further and was quoted at 124.15 yen. In New York, the dollar closed at 124.35 yen, down from 125.025 yen on Wednesday.

Late Dollar Rates

Other late dollar rates in New York, compared to late Wednesday, included: 1.65875 West German marks, down from 1.66285; 1.3650 Swiss francs, down from 1.37215; 5.6170 French francs, down from 5.6330; 1,229.00 Italian lire, down from 1,232.75, and 1.2354 Canadian dollars, down from 1.23575.

Other late dollar rates in Europe, compared to late Wednesday, included: 1.6555 West German marks, down from 1.6625; 1.3635 Swiss francs, down from 1.3732; 5.6130 French francs, down from 5.6505; 1.8575 Dutch guilders, down from 1.8725; 1,229.50 Italian lire, down from 1,235.50, and 1.2339 Canadian dollars, down from 1.2370.

On the Commodity Exchange in New York, gold bullion for current delivery was bid at $454.40, down from Wednesday’s $457.80.

But gold rose overseas. In London, gold finished at a late bid price of $454.50, compared to late Wednesday’s $453.60. In Zurich, gold closed at a bid $457.50, compared to $454.50 late Wednesday.

Earlier, in Hong Kong, gold rose $3.02 to close at a bid $458.81.

Silver fell on New York’s Comex to $6.755 an ounce, down from Wednesday’s $6.757. In London the metal traded at a late bid price of $6.72, compared to Wednesday’s $6.65.