Dollar Ends Year Off; Gold Prices Recover

The dollar ended the year weaker against most major currencies in thin, abbreviated trading today.

Gold prices recovered. Republic National Bank of New York said gold bullion was bid at $410 an ounce as of 4 p.m. EST, up $1.60 from late Thursday, when it lost $5.10 an ounce.

Foreign exchange dealers attributed the dollar’s weaker tone today largely to comments made by Bundesbank Vice President Helmut Schlesinger in an interview with the West German newspaper Die Welt.

Schlesinger said a further increase in U.S. interest rates could cause the dollar to rise, making it more difficult for the United States to reduce its high trade deficit.

One dealer said the comments had an impact on the market because they were interpreted as a call by Schlesinger for a lower dollar and a firmer mark.

However, others said that since trading was thin on the last business day of 1988, some transactions had an exaggerated effect on rates. Trading also ended a few hours earlier than usual.

In Tokyo, where trading ends before Europe’s business day begins, the dollar fell 0.13 yen to close the year at 125.90 yen. In London, it was quoted at 125.10 yen. Later, in New York, the dollar stood at 124.95 yen, down from 125.625.

In London, one British pound cost $1.8062, compared with $1.7900 Thursday. Sterling fetched $1.8115 in New York, up from $1.7905.

Other late dollar rates in New York, compared with late Thursday, included: 1.7770 West German marks, down from 1.7875; 1.4995 Swiss francs, down from 1.5140; 1.19245 Canadian dollars, up from 1.19205; 6.0480 French francs, down from 6.0965; and 1,306 Italian lire, down from 1,315.

On the Commodity Exchange in New York, gold for current delivery closed at $410 an ounce, up from $408.20 late Thursday.