CURRENCY : Dollar Gains in Quiet Session; Gold Falls
The dollar rose against most of the major foreign currencies Wednesday, although most traders stayed on the sidelines, waiting for today’s release of U.S. trade deficit figures.
Gold prices fell. Republic National Bank of New York quoted a late bid of $446.60 for an ounce of gold, down from $450.20 late Tuesday.
Dollar traders were not making any major commitments in advance of the trade figures, said Jack Barbanel, a first vice president with Gruntal & Co. in New York.
The trade deficit has affected the dollar’s direction in recent months because the Reagan Administration has supported a lower dollar as a way of narrowing the gap.
A better-than-expected figure could boost the dollar today. The market was expecting the February deficit to fall within the range of $11.2 billion to $11.8 billion, Barbanel said.
Traders were especially looking for signs of improvement in U.S. exports, Barbanel said.
The foreign exchange markets also were waiting to see what would transpire at the meeting of finance ministers from the Group of Seven major industrial nations. No announcements came out of the Washington gathering by the time the markets closed in New York. The ministers were discussing the dollar and other economic issues.
The dollar was down against the Japanese yen. In Tokyo, the dollar dipped 0.05 yen to a closing 126.45 yen. Later, in London, it was quoted at 126.30 yen and in New York, it slipped to 126.44 yen from 126.685 yen.
Barbanel attributed the dollar’s slippage against the yen to the ripple effects from trading between the Japanese currency and the British pound.
One British pound cost $1.8445 in London, cheaper for buyers than late Tuesday’s $1.8515. In later New York trading, sterling slipped to $1.83755 from $1.8468.
Other late dollar rates in New York on Wednesday, compared to late Tuesday’s prices, included: 1.6950 West German marks, up from 1.68945; 1.4055 Swiss francs, up from 1.39875; 5.74375 French francs, up from 5.7255; 1,255.75 Italian lire, down from 1,275.375, and 1.23775 Canadian dollars, up from 1.23705.
Other dollar rates in Europe late Wednesday, compared to late Tuesday’s rates, included: 1.6895 West German marks, up from 1.6853; 1.3983 Swiss francs, up from 1.3967; 5.7295 French francs, up from 5.7165; 1.8950 Dutch guilders, up from 1.8890; 1,252.50 Italian lire, up from 1,249.75, and 1.2367 Canadian dollars, down from 1.2370.
The price of gold slipped to $447 an ounce on the Commodity Exchange in New York, where it had closed at $450.90 on Tuesday.
In earlier London trading, bullion was sold at a bid price of $449.25 an ounce, down from late Tuesday’s $451.
Trading was lackluster in Europe because most participants have squared their positions ahead of the release of the U.S. trade figures, investors said.
In Zurich, Switzerland, gold’s bid price was $449.50 an ounce, down from $451 late Tuesday. Earlier, in Hong Kong, gold fell $1.39 to close at a bid of $450.82.
Silver slipped to $6.325 an ounce on the Comex in New York, down from $6.425 late Tuesday. In London, silver was quoted at a bid price of $6.41 an ounce, down from Tuesday’s $6.45.
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