CURRENCY : Dollar Continues to Slide in Quiet Trading; Gold Prices Move Higher

The dollar closed lower against all key foreign currencies Wednesday in thin trading.

Gold prices were mostly higher. Republic National Bank’s late quote was $419 an ounce, up $1 from late Tuesday.

Currency dealers said reports of dollar buying by the Federal Reserve on Wednesday and fears of further central bank intervention prevented the currency from falling even further.

But they said the markets remained bearish toward the dollar, with most money traders preoccupied with how President-elect George Bush will deal with the huge U.S. trade and federal budget deficits. If left unchecked, traders fear, both gaps could hurt the economy.

“Until we hear something specific, we’re going to see a further decline in the dollar,” said Earl I. Johnson, a trader with Harris Trust & Co. in Chicago.

A senior Reagan Administration official, meanwhile, firmly denied that the United States and its main trading partners were willing to let the dollar decline.

The official said there was no justification for a lower dollar and there was no disagreement within the Group of Seven industrial nations about exchange rates. The U.S. currency is hovering near its record low against the Japanese yen.

“We’re in touch with our colleagues in the G-7 on a constant basis, and there is no intention to let the dollar drift down,” the official, a leading economic policy-maker who declined to be identified, told Reuters.

Pound Advances

The Tokyo markets were closed for a national holiday Wednesday. But in London, the dollar traded at 121.30 Japanese yen, down from 121.78 yen at Tuesday’s Tokyo close. Later in New York, the dollar stood at 121.175 yen, down from 121.315 yen Tuesday.

In London, the British pound, which has gained more than 10 cents against the dollar in the past six weeks, cost $1.8355 late Wednesday, more expensive for buyers than Tuesday’s $1.8305. Sterling fetched $1.8360 in New York, up from $1.83375 on Tuesday.

Other late dollar rates in New York, compared to late Tuesday, included: 1.71775 West German marks, down from 1.71855; 1.44155 Swiss francs, down from 1.44575; 1.19875 Canadian dollars, down from 1.2008; 5.87125 French francs, down from 5.8765, and 1,276.375 Italian lire, down from 1,277.50.

Late dollar rates in Europe compared to Tuesday, included: 1.7155 West German marks, down from 1.7230; 1.4415 Swiss francs, down from 1.4545; 5.8685 French francs, down from 5.9090; 1.9365 Dutch guilders, down from 1.9480; 1,276.50 Italian lire, down from 1,285.00, and 1.1982 Canadian dollars, down from 1.2002.

On the New York Commodity Exchange, gold for current delivery rose to $420 an ounce from $417.70 late Tuesday.

The late bid in London was $419.25, down from $419.65, and in Zurich, Switzerland, it was $419.30, up from $418.90.

Earlier, gold closed in Hong Kong at $419.87, up from $418.04.

Silver was slightly more expensive. On the New York Comex, silver bullion rose to $6.083 an ounce from $6.061 Tuesday. It rose in London to $6.12 from $6.11.

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