CURRENCY : Dollar Gains on Expectations for G7 Meeting
The dollar rose against most major currencies except the Canadian dollar Monday as traders awaited a meeting of finance ministers and the release of U.S. trade figures.
Gold prices were mixed. Republic National Bank of New York said gold was bid at $450.70 an ounce as of 4 p.m. EDT, up from $449 late Friday.
The dollar rose despite a report that Japan’s trade surplus in March was a larger-than-expected $7.46 billion, including a $3.4-billion surplus with the United States.
Traders were already so short on dollars that they were reluctant to sell more in reaction to the news, said Garrett Glass, vice president for foreign exchange at First National Bank of Chicago.
When the dollar showed resistance to being pushed down, traders went the other direction and bought the currency, Glass said. But in late New York trading the dollar fell from its highs of the day.
Foreign exchange traders said speculation that Wednesday’s meeting of the Group of Seven industrial nations would produce statements supporting the dollar inspired dealers to cover their positions and buy dollars.
West German Finance Minister Gerhard Stoltenberg said Monday that the G7 meeting is likely to reaffirm last December’s agreement on economic policy cooperation and the stabilization of exchange rates.
There was some speculation in the market that the U.S. merchandise trade deficit for February would dip below $10 billion, compared to $12.4 billion in January, but average estimates were slightly more than $11 billion.
In Tokyo, where trading ends before Europe’s business day begins, the dollar rose 0.53 Japanese yen to a closing 125.71 yen. It gained more ground in London, closing at 126.70 yen. Later, in New York, the dollar rose to 126.18 yen from 125.68 late Friday.
In London, the dollar rose against the British pound. It cost $1.8560 to buy one pound, cheaper than $1.8755 late Friday. In New York, the dollar strengthened to $1.8608 for a pound from $1.8757 for a pound late Friday.
Other dollar rates in late New York trading, compared to rates late Friday, included: 1.6812 West German marks, up from 1.6742; 1.3914 Swiss francs, up from 1.3842; 1.2402 Canadian dollars, down from 1.2469; 5.7138 French francs, up from 5.6775, and 1,246.45 Italian lire, up from 1,241.13.
Late dollar rates in Europe compared to Friday’s rates: 1.6855 West German marks, up from 1.6725; 1.3953 Swiss francs, up from 1.3825; 5.7145 French francs, up from 5.6715; 1.8910 Dutch guilders, up from 1.8790; 1,249.50 Italian lire, up from 1,241.75, and 1.2390 Canadian dollars, down from 1.2478.
The bid price for gold in London was $449.50 an ounce, down from Friday’s bid of $451.50. In Zurich, the bid price was $449, down slightly from $449.50 late Friday.
Earlier, in Hong Kong, gold rose 84 cents an ounce to close at a bid price of $451.95. At the end of the trading day on the Commodity Exchange in New York, gold bullion for current delivery was bid at $452.80 an ounce, up from $451.60 late Friday.
Silver was quoted in London late Monday at a bid price of $6.42 an ounce, down from Friday’s $6.48. On New York’s Comex, silver bullion for current delivery was bid at $6.444 an ounce, up from $6.410 late Friday.
