CURRENCY : Worry Over Intervention by Banks Depresses Dollar

NEW YORK — The dollar finished lower against most major currencies Monday amid fears that central banks might intervene to drive the dollar down.

Gold prices also declined. Republic National Bank of New York quoted a late bid of $434.50 an ounce, down from $436 Friday.

The dollar ended lower in New York after rising in the Far East and trading mixed in Europe. Apprehension about possible renewed dollar sales by the central banks of major industrial countries kept activity subdued, traders said.

Attempts early in the trading day to push the dollar to new highs ran into resistance generated by profit taking and intervention worries, dealers said.

Currency traders were also holding back in anticipation of today’s government report on the leading economic indicators for June, a key signal of strength in the economy.

“Essentially, what you have is a market looking for direction,” said Jeff Mondschein, manager of foreign exchange trading at Continental Illinois National Bank & Trust Co. in Chicago.

Robert Hinton, a vice president of foreign exchange at the New York office of Barclays Bank PLC of Britain, suggested that a “big surprise” in the June indicators might be needed to shake the market out of its torpor.

In Tokyo, where trading ends as Europe’s business day begins, the dollar rose 0.72 Japanese yen to a closing 133.25 yen. Later, in London, it was quoted at 132.75 yen. By the end of trading in New York, the dollar had retreated to 132.58 yen, down from 133.14 yen.

The British pound rose to $1.7130 in London, up from $1.7105 Friday. In late New York trading, the pound was quoted at $1.7200, up from $1.7090 late Friday.

Other late dollar rates in New York, compared to late rates Friday, included: 1.8680 West German marks, down from 1.8798; 1.5545 Swiss francs, down from 1.5632; 6.3075 French francs, down from 6.3355; 1,377.25 Italian lire, down from 1,384.50, and 1.2083 Canadian dollars, down from 1.2105.

Other late dollar rates in Europe, compared to late rates Friday, included: 1.8758 West German marks, up from 1.8750; 1.5615 Swiss francs, unchanged; 6.3255 French francs, up from 6.3202; 2.1145 Dutch guilders, down from 2.1185; 1,381.50 Italian lire, up from 1,377.75, and 1.2075 Canadian dollars, down from 1.2105

Gold fell in London to a bid of $433.75 an ounce, down from late Friday’s $435.25. The metals market in Zurich, Switzerland, was closed for a national holiday.

Earlier, in Hong Kong, gold fell 87 cents to a bid of $436.70.

On the Commodity Exchange in New York, gold for August delivery closed at $434.40, down from $436.10.

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