CURRENCY : Dollar Gains Despite Fed Intervention

The dollar finished higher Tuesday against most major currencies in global foreign exchange trading despite what dealers described as light dollar-selling by the Federal Reserve.

Gold prices were mixed, falling in New York after rising in Europe. Republic National Bank in New York quoted a bid for gold as of 4 p.m. EST at $403.80 an ounce, down 70 cents from Monday’s late bid.

Currency dealers said the dollar began rising early in the European day, after opening lower in the wake of central bank intervention on Monday.

Traders were hesitant to take the dollar above 1.8300 West German marks for most of the day but gathered courage late in the European session after noting that the West German Bundesbank had been absent from the open market.

The Fed appeared to have intervened after the dollar edged toward 1.8325 marks late in the morning session in New York and reappeared to sell dollars again in mid-afternoon when the currency drifted up to about 1.8375 marks, according to Daniel Holland, vice president at Discount Corp. in New York.

“The move was not concerted because the other central banks had already gone home for the day,” Holland said.

Comments Aid Dollar

But he said the market wanted to know whether the Fed wanted to curb a rise in the dollar and found, “The Fed does mean to be here.”

The dollar’s rise also was encouraged by reports of comments by Beryl W. Sprinkel, the White House chief economic adviser, who questioned the validity of central bank intervention.

Holland said the dollar’s rise came mainly on speculative activity by professionals traders buying to cover earlier promises to sell the dollar rather than “real corporate demand for the dollar.”

“We have some people throwing in the towel here, saying it doesn’t look like it’s coming down,” he said.

In Tokyo, where trading ends before Europe’s business day begins, the dollar fell 0.39 Japanese yen to 125.70 yen. Later in London, the dollar was quoted at 126.30 yen. In New York, the dollar rose to 126.325 yen from 125.975 yen on Monday.

In London, the dollar gained against the British pound, which fell to $1.7643 from $1.7650 late Monday. The dollar also rose against the pound in New York, where sterling fell to $1.76475 from $1.77325 late Monday.

On the Commodity Exchange in New York, gold for current delivery fell $1.10 to $403.80 an ounce.

Earlier in the day, gold rose in London to $404.75 from $402.75 late Monday; climbed to $405.10 in Zurich, Switzerland, from $402.75, and edged up 5 cents to $407.23 in Hong Kong.

Silver for current delivery slipped 4.7 cents an ounce to $5.916 on the Comex in New York. Earlier in London, silver rose to $5.98 from $5.94.