CURRENCY : Dollar Down; Sterling Moves Into Limelight

The dollar declined sharply Thursday against all major currencies despite the absence of significant central bank intervention, while a strong British pound took center stage in worldwide foreign exchange trading.

Gold prices fell after advancing overseas. Republic National Bank of New York quoted a late bid of $441.50 an ounce, down $3 from Wednesday.

Currency traders said the dollar started out lower overseas because of several factors, including nervousness of possible central bank dollar selling and a report from an unidentified Bank of Japan official that there was room for the dollar to decline further.

“That immediately caused the dollar to sell off in pretty hectic trading in Europe, and that continued here,” said James T. McGroarty, a trader for Discount Corp.

Dealers said there was no evidence of significant central bank intervention in dollar trading for the first time in several weeks, although there were reports that the Bank of England sold sterling for other European currencies to stem the pound’s recent rise.

‘Noncommittal View’

McGroarty said traders are bullish on the pound because of the strong British economy and the prospect for higher interest rates, among other things.

“People are really taking a noncommittal view of the dollar, but they’re looking at sterling,” he said.

In London, one British pound cost $1.7265, more expensive than late Wednesday’s $1.7085. Later, in New York, sterling fetched $1.7280, up from $1.7054.

In Tokyo, where the business day ends before Europe’s begins, the dollar rose 0.45 yen to a closing 133.50 yen. But it fell in London to 132.25 yen, and in New York to 131.575 yen from 133.775 yen late Wednesday.

Other late dollar rates in New York, compared to late Wednesday’s prices, included: 1.8375 West German marks, down from 1.8555; 1.5278 Swiss francs, down from 1.5392; 6.1980 French francs, down from 6.2535; 1.1979 Canadian dollars, down from 1.19835, and 1,360.125 Italian lire, down from 1,373.00.

Late dollar rates in Europe, compared to late Wednesday: 1.8375 West German marks, down from 1.8520; 1.5275 Swiss francs, down from 1.5360; 6.2000 French francs, down from 6.2455; 2.0765 Dutch guilders, down from 2.0910; 1.1968 Canadian dollars, up from 1.1959, and 1,363.50 Italian lire, down from 1,371.50.

Metals Mixed

On the Commodity Exchange in New York, gold bullion for current delivery fell to $441.80 an ounce from $444.80 late Wednesday.

However, gold rose in London to a late bid of $445.80, compared to late Wednesday’s $444.50. In Zurich, the late bid was $445.50, up from $445 late Wednesday.

Earlier, in Hong Kong, gold fell $2.42 an ounce to close at $444.43.

Silver bullion for current delivery fell on the New York Comex, to $7.737 an ounce from $7.827.

Silver, which hit a high of $7.90 in Europe, finished at a late bid of $7.81 in London, compared to Wednesday’s $7.75.

European dealers said speculative buying from Switzerland and the Mideast and rumors regarding a miners strike in Peru forced the price of silver upward, although profit taking slowed its rise.

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