CURRENCY : Dollar Weakens a Bit After GNP Report

The dollar finished mixed Tuesday after reacting mildly to fresh economic data from the Commerce Department.

Gold prices rose after falling in Europe and Asia. Republic National Bank quoted bullion at $449 an ounce as of 4 p.m. EDT, compared to $447.50 late Monday.

Traders said the dollar weakened “insignificantly” after the government reported that the gross national product rose at an annual rate of 2.3% in the first quarter.

The Commerce Department said consumer spending, the biggest surge in business investment in more than four years and growing exports kept the gross national product rising. Although the figure was down from the 4.8% growth reported during the previous quarter, it was in line with market expectations.

“There was minimal activity after the GNP report,” said Curtis Perkins, a trader at Chemical New York Capital Markets Group. Activity picked up somewhat later in the session on technical factors.

Much of the day’s activity centered on the buying of dollars against the Japanese yen. But Ian Spence, chief dealer at Manufacturers Hanover Trust Co., said he expects the dollar’s rise against the yen in domestic trading to be “more than offset by selling in Tokyo” once currency markets open for trading.

“Exporters and other Japanese companies are happy with anything at 125 yen (to the dollar) or higher,” Spence said.

In Tokyo, where the business day ends as Europe’s begins, the dollar fell 0.43 yen to a closing 124.57 yen. Later, in London, it was quoted at 124.70 yen. In New York, the dollar finished at 125.15 yen, up from 124.735 yen.

In Europe, the dollar ended slightly lower after trading in a narrow range. A dealer in London noted that “the GNP figure hasn’t given us a clear incentive to do anything new with the dollar.”

But late in the session the dollar staged a partial recovery in reaction to reports that Saudi Arabia might break diplomatic relations with Iran.

The British pound rose in London to $1.8760, from $1.8730 on Monday. In New York it cost $1.8744 to buy one pound, more expensive than Monday’s $1.87355.

Other late dollar rates in New York, compared to late Monday, included: 1.67235 West German marks, down from 1.67525; 1.38725 Swiss francs, down from 1.38735; 5.6945 French francs, up from 5.68625; 1,246.50 Italian lire, up from 1,244.75, and 1.2286 Canadian dollars, down from 1.23175.

Late dollar rates in Europe, compared to late Monday: 1.6747 West German marks, down from 1.6765; 1.3860 Swiss francs, unchanged; 5.6875 French francs, down from 5.6915; 1.8765 Dutch guilders, down from 1.8790; 1,244.00 Italian lire, down from 1,245.00, and 1.2289 Canadian dollars, down from 1.2309.

Gold prices were mixed. On the New York Commodity Exchange, gold rose to close at $449.80 an ounce, from Monday’s $448.90.

In London gold fell to a late bid price of $447.50 an ounce, from late Monday’s $449.50. In Zurich, gold closed at a bid of $448, compared to $450 late Monday. Earlier in Hong Kong, gold fell $1.19 to close at a bid of $449.94.

Silver bullion prices also varied. On New York’s Comex, silver rose to $6.381 an ounce, from Monday’s $6.355. But in London the metal was trading at a late bid price of $6.36 an ounce, compared to Monday’s $6.42.

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