In Brief : Dollar Drops on Foreign Markets

The U.S. dollar was lower against the major currencies in European markets today after a day of mainly trendless trading.

Gold prices were higher.

Foreign exchange dealers said it was a quiet start to the year and they expect that the dollar will go lower under the influence of the expanding U.S. budget deficit.

In London, where banks’ base lending rates are at a high 13%, a government assurance that the rate will be kept high to combat inflation drove the British pound up more than two cents. One pound cost $1.8270 in London late today, up from Friday’s late cost of $1.8062 on the last trading day before the New Year holiday.

Other late rates compared with Friday’s late rates included: 1.7620 West German marks, down from 1.7725; 1.4912 Swiss francs, down from 1.5025; 6.0125 French francs, down from 6.0600; 1.9870 Dutch guilders, down from 2.0020; 1,295.75 Italian lire, down from 1,305.25, and 1.1900 Canadian dollars, down from 1.1927.