CURRENCY : Dollar Edges Higher in Very Slow Trading

The dollar strengthened marginally against major foreign currencies Monday but exchange dealers said trading was extremely slow, reflecting a reluctance to do business before the government’s market-moving monthly trade report.

Gold prices edged down. Republic National Bank’s late quote was $420.25 an ounce, down $2.25.

Currency strategists read little significance into the small gain, saying it largely was because of internal market influences of supply and demand, not outside news.

But some said speculation that the Federal Reserve would move to tighten interest rates may have strengthened the dollar a bit. Higher rates make dollar-denominated investments more attractive.

Sign of Strength

Many dealers said the overwhelming force shaping the market’s behavior was reluctance to take any risky positions before the Commerce Department’s report on the October trade deficit, due Wednesday.

The dollar rose 0.49 yen to 122.92 yen in Tokyo, was quoted at 122.83 yen later in London and in New York fetched 122.80 yen, up from 122.49 yen late Friday.

The British pound fell in London to $1.8418 from $1.8490 Friday and in New York fetched $1.8435, down from $1.8495 late Friday.

Other late dollar rates in New York, compared to Friday’s rates, included: 1.7415 West German marks, up from 1.7352; 1.4643 Swiss francs, up from 1.4620; 1.1970 Canadian dollars, up from 1.1967; 5.9485 French francs, up from 5.9290, and 1,284.25 Italian lire, up from 1,282.75.

Gold for current delivery fell $2.80 an ounce from Friday’s level to $420.10 on the New York Commodity Exchange.

The metal dropped $1 to $419.75 in London; slipped $1.05 in Zurich, Switzerland, to $419.25, and fell $2.10 in Hong Kong to $422.29.

Silver bullion for current delivery fell 0.6 cent an ounce on the New York Comex to $6.169 and in London lost 2 cents to $6.14.