The dollar rose against most major currencies except the Japanese yen in U.S. trading Tuesday after moving generally higher on markets abroad.
Gold prices posted sharp gains. At 4 p.m. EST, Republic National Bank of New York quoted gold at $392.90 an ounce, up from Monday’s late bid of $387.30.
Victor Polce, a currency trader for Bear, Stearns & Co., said much of the dollar’s movement was motivated by technical factors.
Dealers bought dollars and sold West German marks after the West German central bank indicated that key interest rates will not be changed in the near future. In recent days, the mark had been driven higher periodically on speculation that West German interest rates might be going up.
In London, one British pound cost $1.7220 late Tuesday, cheaper for buyers than Monday’s late $1.7250. Later in New York, sterling fetched $1.72155, down from $1.72335 on Monday.
Earlier in Tokyo, the dollar closed at 129.03 Japanese yen, up from 127.63. In London late Tuesday the dollar traded lower at 128.80 yen. The dollar finished at 128.825 yen in New York, lower than Monday’s late level of 129.15.
Other late dollar rates in New York, compared to Monday’s late levels, included: 1.85525 West German marks, up from 1.85275; 1.5845 Swiss francs, down from 1.58575; 1.19825 Canadian dollars, up from 1.19235; 6.303 French francs, up from 6.29725, and 1,362.625 Italian lire, up from 1,362.125.
Other late rates for the dollar in Europe, compared to late Monday’s rates, included: 1.8520 West German marks, down from 1.8531; 1.5847 Swiss francs, up from 1.5830; 6.3000 French francs, up from 6.2955; 2.0945 Dutch guilders, up from 2.0855; 1,362.37 Italian lire, up from 1,359.25, and 1.1985 Canadian dollars, up from 1.1928.
Gold bullion prices gained from $4 to more than $5 an ounce.
On the Commodity Exchange in New York, gold bullion for current delivery closed at $393.30 an ounce, $5.30 an ounce higher than Monday’s close.
The late gold bid price in London, the major European trading center, was $391.45 an ounce, up from $386.25 Monday.