CURRENCY : Dollar Slips Marginally in Thin Trading : Pessimism Grips Metals Market; Gold Slips Again
The dollar weakened marginally Monday in scanty trading, reflecting currency dealers’ reluctance to do much business before some potentially significant meetings and economic reports.
Gold prices eroded further, persisting in a slide that has pushed bullion to the lowest levels in about 18 months. Republic National Bank of New York reported a late quote of $409.20 an ounce, down $2.55 from Friday.
Foreign exchange brokers said a spate of possibly market-moving news expected during the week incited a cautious attitude toward the dollar.
Dealers Pessimistic
Aside from meetings planned by the International Monetary Fund, World Bank and the finance ministers of leading industrialized democracies, the United States will report a final revision of second-quarter economic growth and the August rate of inflation. In addition, Japan will report a range of economic statistics and Britain will report its money supply growth figures.
“There seems to be a thousand reasons not to trade, and that seems to be what happened,” said John Baker, chief dealer at the New York branch of Bank Julius Baer & Co.
Some dealers said they were growing pessimistic about the dollar’s ability to strengthen. They said the currency’s failure to appreciate sharply in the aftermath of a large reduction in the U.S. monthly trade deficit reported last week was viewed as a reason to start selling dollars.
In Tokyo, the dollar rose 0.04 yen to 133.80 yen. Later in London, it was quoted at 133.90 yen. But by the time trading ended in New York the dollar weakened to 133.54 yen, compared to 134.12 yen level Friday.
The British pound strengthened slightly against the dollar in London, to $1.6785 from $1.6758. Later in New York sterling fetched $1.6787, unchanged from Friday.
Other late rates in New York, compared to levels late Friday: 1.8677 West German marks, down from 1.8711; 1.5780 Swiss francs, down from 1.5808; 1.2189 Canadian dollars, down from 1.2232; 6.3495 French francs, down from 6.3630, and 1,391.75 Italian lire, down from 1,399.00.
Gold continued to weaken, reflecting what dealers called investor disillusionment with the metal’s value as a hedge against inflation.
On the Commodity Exchange in New York, gold for current delivery fell $2.50 an ounce to $409.20. Earlier, gold fell $3.07 in Hong Kong to $441.40; in Zurich it slipped $2.50 to $408.50, and in London it dropped $2.70 to $409.30.
Silver for current delivery rose 4.4 cents on the New York Comex to $6.37 an ounce. Earlier in London, silver slid 12 cents to $6.28.
