CURRENCY : Dollar, Gold Close Mixed; Pound Again in Spotlight
The dollar was mixed in lackluster trading Wednesday as the British pound continued to draw most investor interest.
Gold prices also were mixed. Republic National Bank of New York quoted a late bid of $397.75 an ounce, up 50 cents from late Tuesday’s $397.25.
There was limited interest in the dollar, which traded within a narrow range, and investors turned instead to higher-yielding currencies such as the pound, said James T. McGroarty, a vice president at Discount Corp.
McGroarty said the dollar was caught between conflicting forces--economic fundamentals that should move it higher and the desire of the major industrial powers to keep the currency at current levels.
No Push From IMF
On Monday, the central banks of several nations, including the U.S. Federal Reserve, were reported to have intervened in foreign exchange markets, selling dollars to cap the currency’s rise.
Overseas dealers said the West Berlin meetings of the International Monetary Fund and the World Bank were not offering any news to stimulate trading. Most top officials at the meeting were merely calling for exchange rate stability.
In London, one pound cost $1.6840 late Wednesday, more costly for buyers than late Tuesday’s $1.6785. The pound also advanced against the dollar in New York, rising to $1.6905 from late Tuesday’s $1.6780.
The pound surged more than 2 cents against the dollar over Tuesday and Wednesday after a better-than-expected British trade deficit report for August.
The British government said Tuesday that the deficit stood in August at 1.813 billion pounds, or about $3.06 billion U.S., the country’s second-worst monthly shortfall but down from July’s record 2.651 billion pounds.
In Tokyo, the dollar closed at 134.20 Japanese yen, down from 134.58 yen. In London, the dollar traded at 134.20 yen, and in New York, it slipped to 134.02 yen from 134.63 yen late Tuesday.
Other late dollar rates in New York on Wednesday, compared to late Tuesday’s quotes, included: 1.8767 West German marks, down from 1.8780; 1.5897 Swiss francs, up from 1.5895; 6.3877 French francs, down from 6.3915; 1,398.87 Italian lire, down from 1,399.42, and 1.2212 Canadian dollars, up from 1.2205.
Other late rates in Europe, compared to late Tuesday’s prices, included: 1.8785 West German marks, down from 1.8790; 1.5920 Swiss francs, up from 1.5910; 6.3980 French francs, up from 6.3945; 2.1182 Dutch guilders, down from 2.1185; 1,401.00 Italian lire, down from 1,402.95, and 1.2215 Canadian dollars, up from 1.2185.
Gold prices were mixed.
Bullion closed at $398.20 an ounce on New York’s Commodity Exchange, up from $397.30.
Gold closed in London at a bid of $396.50, up from $395.30, while in Zurich, gold was quoted at $394.90 bid, down from $395.75.
In Hong Kong, gold closed at a bid of $401.64, up from $401.16.
Silver was unchanged at $6.166 an ounce on the Commodity Exchange in New York. Silver was also unchanged in late London trading, where the metal was quoted at a bid of $6.15.