CURRENCY : Dollar Gains in Lull Before Trade Report
The dollar rose in quiet trading Tuesday as foreign exchange markets waited for a key finance ministers’ meeting and the release of U.S. trade deficit figures.
Gold prices were mixed. Republic National Bank of New York quoted a late bid of $450.20 for an ounce of gold, down 50 cents from $450.70 on Monday.
Traders said there was little foreign exchange activity in advance of today’s meeting of finance ministers from the seven major industrialized countries and the release Thursday of U.S. trade figures for February.
In the meantime, the dollar was “holding up very well, going nowhere,” said Ted Wolicki, a trader with Continental Illinois National Bank & Trust Co. in Chicago.
The finance ministers are expected to discuss the dollar. West German Finance Minister Gerhard Stoltenberg has said they are likely to reaffirm December’s agreement on economic-policy cooperation and the stabilization of exchange rates.
The trade figures are considered key to the dollar’s direction because the Reagan Administration has supported a lower dollar as a way to cut the trade deficit. When the dollar is down, imports are more expensive, but U.S. goods become cheaper overseas.
Dan Holland, a trader at Discount Corp., said the dollar also was boosted partly by technical factors, but also spurted upward on the news that a U.S. Marine had been shot and killed in Panama. Traders consider the dollar a safe haven during times of political uncertainty.
In London, the British pound declined to $1.8515 from $1.8560 late Monday. In later New York trading, the pound fell to $1.8468 from $1.86075.
Other late dollar rates in New York, compared to late Monday’s prices, included: 1.68945 West German marks, up from 1.68115; 1.39875 Swiss francs, up from 1.3914; 5.7255 French francs, up from 5.71375; 1,275.375 Italian lire, up from 1,246.45, and 1.23705 Canadian dollars, down from 1.24015.
Other late dollar rates in Europe, compared to late Monday’s rates, included: 1.6853 West German marks, down from 1.6855; 1.3967 Swiss francs, up from 1.3953; 5.7165 French francs, up from 5.7145; 1.8890 Dutch guilders, down from 1.8910; 1,249.75 Italian lire, up from 1,249.50, and 1.2370 Canadian dollars, down from 1.2390.
In Tokyo, the dollar rose to a closing 126.50 Japanese yen from 125.71 yen at Monday’s close. Later, in London, the dollar was quoted at 126.49 yen, and in New York, it rose to 126.685 yen from 126.175 yen.
The price of gold bullion fell on the Commodity Exchange in New York, where it closed at $450.90 an ounce, compared to $452.80 late Monday.
Gold rose in thin trading in London to a late bid price of $451 an ounce, up from a bid of $449.50 late Monday. In Zurich, Switzerland, gold also rose to $451 an ounce, up from $449 bid late Monday.
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