CURRENCY : Dollar Slips as Traders Await Price Data
The dollar declined against most major currencies Tuesday, pushed down by a wave of selling as the U.S. currency market reopened after the Labor Day weekend.
Gold prices also fell after a mixed performance overseas. Republic National Bank of New York reported a late bid of $426.60 an ounce, down $2.40 from Friday.
Currency brokers said activity in the foreign exchange market slowed with the dollar trading in a narrow range after Friday’s selloff before the holiday weekend. Friday’s activity was sparked by a higher-than-expected August unemployment figure--5.6%, up from 5.4% in July--suggesting to some that the U.S. economy may be weakening.
Friday’s selloff was followed by a further weakening of the dollar in foreign markets Monday, while U.S. currency markets were closed.
Analysts said that after last week’s activity, investors were turning their attention to this week’s report on the producer price index, an important measure of inflation, and next Wednesday’s U.S. trade deficit figures.
“The dollar market will be a side market until then,” said Jack Barbanel, first vice president with Gruntal & Co. in New York.
Traders said the markets are likely to remain cautious before release of the fresh data.
In Tokyo, where the trading day begins, the dollar fell 0.43 yen to a closing 135.60 yen. Later, in London, it was quoted at 135.68 yen. At the end of the trading day in New York, the dollar was down 0.85 yen at 134.925 yen.
In London, the dollar fell against the British pound. It cost $1.7035 to buy one pound, almost two cents more than $1.6860 late Monday. Later in New York, the pound fetched $1.70365, compared to $1.6850 late Friday.
Other late dollar rates in New York, compared to levels late Friday included: 1.84015 West German marks, down from 1.8524; 1.5530 Swiss francs, down from 1.5567; 1.23405 Canadian dollars, down from 1.2355; 6.2695 French francs, down from 6.2915, and 1,378.00 Italian lire, down from 1,381.50.
Other late dollar rates in Europe, compared to late Monday: 1.8425 West German marks, down from 1.8555; 1.5525 Swiss francs, down from 1.5625; 6.2715 French francs, down from 6.3124; 2.0820 Dutch guilders, down from 2.0957; 1,377.65 Italian lire, down from 1,380.50, and 1.2340 Canadian dollars, up from 1.2338.
Gold rose in London to a late bid of $428.10, compared to late Monday’s $427.50. In Zurich, gold closed at $428.00, compared to $427.50 late Monday. Earlier, in Hong Kong, gold fell 23 cents to close at a bid of $429.15. On the Commodity Exchange in New York, gold closed at $426.70, compared to $429.30 late Friday.
Silver bullion prices rose on the London market, where the metal was trading at a late bid of $6.56, compared to Monday’s $6.50. On the New York Comex, silver for current delivery fell to $6.485, compared to Friday’s $6.518.
Tables, Page 8