CURRENCY : Dollar Closes Mixed in Thin Trading

The dollar finished mixed against major foreign currencies Tuesday in trading marked by speculation about interest rates.

Foreign exchange dealers said trading was thin because of holidays in Asia and West Germany, and other European markets were uncertain after Monday’s interventions by central banks to bring down the dollar.

Traders were reluctant to buy or sell dollars in large amounts without having a clear idea of whether the Federal Reserve is likely to push up short-term U.S. interest rates, which would help the dollar, analysts said.

“The currency markets probably want to get a picture of the interest rate situation here in the U.S.,” said Craig Sloane, a currency analyst at Smith Barney, Harris Upham & Co.

The main event affecting the dollar this week is likely to be President Bush’s budget speech to Congress on Thursday, dealers said. Reassuring words about cutting the federal deficit would bolster the dollar, traders said.

In Tokyo, the dollar eased to 129.50 Japanese yen from Monday’s 129.60. In London, the dollar traded lower at 129.43 yen. In New York, the dollar rose to 129.48 yen from 129.41.

In London, the pound rose to $1.7377 late Tuesday from $1.7345 on Monday. Later in New York, the pound rose to $1.7370 from $1.7366.

Other late rates for the dollar in New York, compared to Monday’s late rates, included: 1.8716 West German marks, down from 1.8725; 1.5893 Swiss francs, down from 1.5898; 1.1828 Canadian dollars, up from 1.1823; 6.3680 French francs, down from 6.3705, and 1,364.8 Italian lire, down from 1,366.5.

Other late rates for the dollar in Europe, compared to Monday’s late rates, included: 1.8720 West German marks, down from 1.8810; 1.5913 Swiss francs, down from 1.5969; 6.3700 French francs, down from 6.3950; 2.1140 Dutch guilders, down from 2.1200; 1,365.50 Italian lire, down from 1,370.50, and 1.1813 Canadian dollars, down from 1.1840.

Gold bullion prices were higher in Europe and lower later in New York.

The late gold price in London was $392.55 an ounce, up from $388.95. In Zurich, Switzerland, gold rose to $392 bid from $387.50.

On the Commodity Exchange in New York, gold bullion for current delivery fell to $392 from $394. Later, Republic National Bank of New York said gold rose to $390.10 from $391.90.

Financial markets in Hong Kong were closed for the Chinese lunar new year celebrations.