CURRENCY : Dollar Lower in Europe; Gold Prices Mixed
The U.S. dollar finished slightly lower against major currencies in Europe on Monday during trading made light by the close of U.S markets for the Labor Day holiday, dealers said.
Gold prices finished mixed.
Light commercial trading late Monday helped the dollar regain some ground lost earlier in the day in a downward slide that stopped before the U.S. currency hit 1.8500 West German marks.
“The market tried again to push the dollar below 1.85 (marks) in the morning, but it showed good resistance,” said a dealer in Frankfurt, West Germany.
Dealers said the currency was helped by the absence of trading in the United States.
“It would have been difficult to sell the dollar at 1.85 (marks) in today’s restricted trading environment,” one dealer said.
Dealers in London said Monday morning’s decline continued a dollar plunge begun Friday on news that the U.S. unemployment rate had risen to 5.6% from 5.4% in July.
Traders said the market will now adopt a wait-and-see attitude, looking ahead to the release of U.S. merchandise trade figures to point a new direction for the dollar.
In Tokyo, where trading ends as Europe’s business day begins, the dollar fell 0.72 Japanese yen to a closing 136.03. Later, in London, it was quoted at 135.65 yen.
In London, the dollar fell against the British pound. It cost $1.6860 to buy one pound, more than $1.6755 late Friday.
Other late dollar rates in Europe, compared to late Friday’s rates, included: 1.8555 West German marks, down from 1.8665; 1.5625 Swiss francs, down from 1.5725; 6.31240 French francs, down from 6.3365; 2.0957 Dutch guilders, down from 2.1050; 1.380.50 Italian lire, down from 1,388.50, and 1.2338 Canadian dollars, down from 1.2362.
Gold prices swung in a narrow range in quiet trading, adding to a growing perception that gold could face weaker prices in the near future, dealers said.
The lack of a surge in gold prices despite the recent weakness of the dollar has contributed to disinterest in gold, dealers said.
Gold settled in London to a late bid of $427.50 an ounce, unchanged from late Friday’s $427.50.
In Zurich, Switzerland, gold was lower, closing at a bid $427.50, compared to $428 late Friday.
Earlier, in Hong Kong, gold fell $1.54 to close at a bid $429.38.
Silver bullion prices fell on the London market where the metal was trading at a late bid of $6.50 an ounce, compared to Friday’s $6.52.