CURRENCY : Dollar Gains Against Most Currencies; Gold Prices Fall
The dollar rose against most major currencies except the British pound and Canadian dollar Monday, aided by the absence of negative news from officials attending the economic summit in Toronto.
Gold prices fell in the United States. Republic National Bank of New York said gold was bid at $450.70 an ounce as of 4 p.m. EDT, down from $454.25 late Friday.
Dealers said there was no specific news to account for the dollar’s strength. It came despite continued dollar sales by West Germany and expectations that the West German central bank would raise a key interest rate today.
The gains were in line with a long-term trend stemming from last week’s better-than-expected U.S. trade report for April, which indicated that the trade deficit is shrinking.
Peter M. Schmidhuber, monetary affairs commissioner of the European Economic Community, was quoted as saying that the Group of Seven summit leaders believe that the dollar will remain roughly in the range of the last four months at least through year-end.
But as for major news from the Toronto summit, “We didn’t expect anything and we didn’t get anything,” said Douglas Madison, a corporate foreign exchange trader for BankAmerica International in New York.
In Tokyo, where trading ends before Europe’s business day begins, the dollar rose to 126.09 Japanese yen from Friday’s 125.73 yen. Later in London, it was quoted at 126.23 yen. At the end of trading in New York, the dollar rose to 126.31 yen from 125.74 yen.
In London, the dollar gained against the British pound. It cost $1.7865 to buy one pound, more expensive than $1.7827 late Friday. Later in New York, the dollar weakened to $1.7845 to the pound from $1.7837.
Other late dollar rates in New York, compared to late Friday’s rates, included: 1.7608 West German marks, up from 1.7486; 1.4623 Swiss francs, up from 1.4558; 5.9368 French francs, up from 5.9010, and 1,305.50 Italian lire, up from 1,298.50.
Other late dollar rates in Europe, compared to late Friday, included: 1.7543 West German marks, up from 1.7530; 1.4580 Swiss francs, up from 1.4575; 5.9173 French francs, up from 5.9120; 1.9730 Dutch guilders, up from 1.9695; 1,302.00 Italian lire, up from 1,301.35, and 1.2094 Canadian dollars, down from 1.2130.
Gold prices rose in Asia and Europe, catching up with levels reached late Friday in U.S. trading, but then fell in the United States in part because of a drop in oil prices.
In Hong Kong, gold rose $3.15 an ounce to close at a bid price of $455.30.
Gold rose in London to a late bid of $453.90, up from late Friday’s $450. After dull trading in Zurich, Switzerland, gold closed at a bid of $452.50, up from $450.40.
Later on the Commodity Exchange in New York, gold bullion for current delivery closed at $450.70, down from $454.50.
Silver bullion prices followed the rise of gold on the London market, where the metal closed at a late bid of $7.26 an ounce, up from Friday’s $7.08. On New York’s Comex, silver for current delivery closed at $7.175, down from $7.235.
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