CURRENCY : Greenspan’s Report Leaves Dollar Mixed; Gold Soars

The dollar finished mixed Tuesday after Federal Reserve Board Chairman Alan Greenspan failed to signal a dramatic shift in U.S. monetary policy in testimony to Congress.

Gold prices shot up. In New York, Republic National Bank’s late quote was $385.50 bid, up $5.25 an ounce from Friday’s late bid.

U.S. financial markets were closed Monday for the Presidents’ Day holiday.

Currency Unloaded

Foreign exchange dealers said the Fed chief’s testimony to the Senate banking committee on Tuesday offered no new insights into the central bank’s thinking and did not indicate that additional interest rate increases were imminent.

In his testimony, Greenspan repeated the Fed’s resolve to fight inflation by pushing interest rates higher, a tactic the central bank has been using in its battle to keep prices under control.

Bob Morrissey, a senior trader at the Bank of Boston, said market operators last week and Monday in Europe and Asia had bought dollars partly on the grounds that Greenspan might outline a more aggressive anti-inflation policy. Holders who had accumulated large dollar positions unloaded the currency after Greenspan delivered his semiannual report to Congress on monetary policy.

Although the dollar ended Tuesday above New York’s closing levels on Friday, it was sharply off its opening levels.

In Tokyo, the dollar rose 1.40 Japanese yen to a closing 127.15 yen. Later in London, the dollar traded at 126.75 yen. In New York, the dollar ended at 127.15 yen, compared to 125.88 on Friday.

In London, the British pound fell to $1.7565 from $1.7665 late Monday. Later in New York, sterling rose to $1.74725 from late Friday’s $1.7745.

Other late dollar rates in New York, compared to late Friday’s rates, included: 1.8440 West German marks, up from 1.8375; 1.5690 Swiss francs, up from 1.5593 Swiss francs; 1.19225 Canadian dollars, up from 1.1899 Canadian dollars; 6.2795 French francs, up from 6.2575 French francs, and 1,351.00 Italian lire, down from 1,353.00.

Dealer Buying

Other late dollar rates in Europe, compared to late Monday’s rates, included: 1.8420 West German marks, down from 1.8435; 1.5685 Swiss francs, up from 1.5683; 6.2735 French francs, down from 6.2825; 2.0910 Dutch guilders, up from 2.0820; 1,356.00 Italian lire, up from 1,350.50, and 1.1897 Canadian dollars, unchanged.

Gold gained as investors took the opportunity to buy at prices that had been pushed lower by recent selling by dealers in Australia and the Soviet Union, said William O’Neill, a vice president of Elders Futures Inc.

“There was a strong bout of dealer buying in New York which seemed to result from demand for cash bullion,” O’Neill said. “It’s the first real surge of this type this year.”

Gold prices rose $1.75 in London to a late bid of $384; added 80 cents in Zurich, Switzerland, to close at $383; climbed 33 cents in Hong Kong to $384.34 and on the Commodity Exchange in New York , rose $5.10 to $385.90.

Silver was quoted in London at a late bid of $5.93 an ounce, unchanged from Monday’s late bid. On New York’s Comex, silver bullion for current delivery settled at $5.926, down from $5.928 Friday.