CURRENCY : Dollar Rises in Quiet Trading

The dollar rose against major foreign currencies in quiet trading Wednesday and gold gave back its gains of recent sessions.

Republic National Bank of New York said gold was bid at $453.75 an ounce as of 4 p.m. EDT, down from $459.20 late Tuesday.

The recent stability of exchange rates encouraged foreign exchange dealers to move their money into high-yielding currencies, such as Australian and New Zealand dollars, and out of low-yielding currencies such as the West German mark and Swiss franc, traders said.

Little Reaction to Trade Report

“The low-interest-rate currencies are out of favor,” said Robert Hatcher, a corporate trader for Barclays Bank in New York.

The market showed little reaction to a report that the U.S. merchandise trade deficit on a balance-of-payments basis fell to $35.9 billion in the first quarter of 1988 from $41.2 billion at the end of 1987. The decline was expected, traders said.

In Tokyo, the dollar closed little changed at 124.30 Japanese yen, up 0.05 yen. In later London trading, it was quoted at 124.40 yen. At the end of the trading day in New York, the dollar rose to 124.42 yen from 124.18 yen.

In London, the British pound fell to $1.8650 from $1.8680 late Tuesday. Later in New York, sterling fell to $1.8631 from $1.8673.

Other dollar rates in late New York trading, compared to rates late Tuesday, included: 1.7064 West German marks, up from 1.7007; 1.4238 Swiss francs, up from 1.4196; 1.2427 Canadian dollars, up from 1.2417; 5.7583 French francs, up from 5.7420, and 1,265.38 Italian lire, up from 1,262.03.

Other late dollar rates, compared to late Tuesday’s rates, included: 1.4245 Swiss francs, up from 1.4150; 5.7550 French francs, up from 5.7395; 1.9090 Dutch guilders, up from 1.9030; 1,264.50 Italian lire, up from 1,261.80, and 1.2434 Canadian dollars, up from 1.2412.

Gold Lower in New York

Gold prices fell in Europe and then followed suit in New York. Prices were pulled down by a drop in the price of platinum and by reports of a major gold sale, possibly by an Australian mine, said Michael Mikolay, chief bullion dealer for Rhode Island Hospital Trust National Bank in Providence, R.I.

In Hong Kong, before the European selloff, gold fell 42 cents an ounce to close at a bid $460.27.

In Zurich, Switzerland, the late bid for gold was $454.50, down from $458.

The late bid for gold in London was $454, down from $457.75. At the end of the trading day, gold bullion for current delivery fell to $454.40 on the Commodity Exchange in New York, down from $460.60.

Silver was quoted at a bid of $6.67 an ounce in London, down from late Tuesday’s price of $6.71. On New York’s Comex, silver bullion for current delivery fell to $6.592 from $6.754.

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