CURRENCY : West German Sales Send Dollar Lower

The dollar lost ground Thursday against all major currencies in fairly active domestic trading after rising overseas, amid reports of continued West German selling of dollars.

Gold prices were mixed. Republic National Bank of New York said gold bullion was bid at $456.75 an ounce as of 4 p.m. EDT, up $1 from late Wednesday.

Currency traders and analysts said there were doubts whether Karl Otto Poehl, head of the West German Bundesbank, was sincere when he said that the central bank recently sold about $2 billion solely to trim its dollar reserves, not to depress the U.S. currency.

The dollar had rallied on those remarks Wednesday, along with comments from Federal Reserve Board Chairman Alan Greenspan that a further depreciation of the currency wouldn’t help the nation’s trade deficit.

“The market reassessment of that (Poehl’s remarks) was that it didn’t continue to feel that was true,” said James T. McGroarty, a vice president at Discount Corp. in New York.

He said the dollar headed lower after traders learned that the Bundesbank sold a small amount of dollars Thursday.

Bigger Trade Gap

Analysts also blamed the dollar drop on technical factors, as well as an upward revision in the March trade deficit report.

The Commerce Department reported Thursday that with seasonal adjustment, the trade gap for March turned out to be $11.9 billion, 22% higher than the previously reported $9.7 billion figure.

In Tokyo, where trading ends before Europe’s business day begins, the dollar closed up 0.11 Japanese yen at 125.43 yen. In London, the dollar traded at 125.25 yen, while in New York, it stood at 124.60 yen, down from 125.615 late Wednesday.

In London, one British pound cost $1.8117 late Thursday, cheaper for buyers than Wednesday’s late $1.8175. Sterling fetched $1.8215 in New York, up from $1.81025.

Other late dollar rates in New York, compared to late Wednesday, included: 1.71425 West German marks, down from 1.7261; 1.43075 Swiss francs, down from 1.4386; 1.21945 Canadian dollars, down from 1.22175; 5.7935 French francs, down from 5.8175, and 1,274.50 Italian lire, down from 1,280.88.

Gold Prices Mixed

Late rates in Europe, compared to late rates Wednesday, included: 1.7230 West German marks, up from 1.7183; 1.4370 Swiss francs, up from 1.4350; 5.8155 French francs, up from 5.7923; 1.9330 Dutch guilders, up from 1.9250; 1.2211 Canadian dollars, down from 1.2220; and 1,280.50 Italian lire, up from 1,273.50.

Gold prices rose in domestic trading following a mixed performance abroad.

On the Commodity Exchange in New York, gold bullion for current delivery rose to $457.10 from $456.10 late Wednesday.

In London, the late bid was $455.25, down from $458, while in Zurich, Switzerland, gold was bid at $455.50, down from $458.50.

Earlier, in Hong Kong, gold closed up at $456.59 from $458.98.

Silver prices declined. On the New York Comex, silver bullion for current delivery traded at $7.145 an ounce, down from $7.15 late Wednesday.

In London, silver was bid at $7.08, down 7 cents.

Tables, Page 7