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CURRENCY : Dollar, Gold Fall; Trade Figures Awaited

Associated Press

The dollar fell Tuesday as investors continued to be concerned that the government would report a big increase in the trade deficit on Thursday.

“The trade figures will be the trigger of any movement” on the foreign exchange market, said one trader in Frankfurt, West Germany.

Some economists were forecasting an August deficit of about $11.3 billion, wider than July’s deficit of $9.53 billion.

Gold prices were slightly lower. Republic National Bank of New York said gold was bid at $404 an ounce as of 4 p.m. EDT Tuesday, down from $408.75 an ounce late Monday.

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Dealers in Europe said the dollar’s weakness against the Japanese yen was set off in Tokyo trading by a large order to sell dollars for yen, which in turn triggered other sell orders.

Two market sources in London said Salomon Bros. in Tokyo sold $1 billion for yen during the Tokyo day on behalf of a client. An official at Salomon Bros. in London refused to comment.

The momentum of the pound’s rise Monday continued Tuesday and the Bank of England reportedly intervened to keep the market from getting carried away. The Bank of England refused to comment on the reports.

In Tokyo, where trading ends before Europe’s business day begins, the dollar fell 2.35 yen to a closing 131.15 yen from Friday’s 133.50 yen. (The Tokyo market was closed Monday for a holiday.) Later, in London, it was quoted at a lower rate of 130.80 yen. At the end of the day in New York, the dollar closed at 131.07 yen, down from 132.18 late Monday.

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In London, the dollar fell against the British pound. It cost $1.7175 to buy one pound, more expensive than $1.7130 late Monday. The dollar also fell against the pound in New York. The pound rose to $1.7172 from $1.7127 late Monday.

Other late dollar rates in New York, compared to late Monday’s rates, included: 1.8541 West German marks, down from 1.8545; 1.5615 Swiss francs, down from 1.5745; 1.2111 Canadian dollars, up from 1.2070; 6.3165 French francs, down from 6.3180, and 1,380.75 Italian lire, down from 1,388.50 late Friday. There was no Italian lira quote available late Monday.

In Hong Kong, gold rose $2.79 an ounce to close at a bid $412.13 an ounce.

Gold fell in London to a late bid price of $406.25 an ounce, compared to late Monday’s $407.25. In Zurich, gold closed at a bid $406, compared to $407 late Monday.

On the Commodity Exchange in New York, gold bullion for current delivery fell to $404.40 an ounce from $408.60 Monday.


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