CURRENCY : Dollar Slips After Key Nations Vow to Stabilize Value

The dollar, tamed by a declaration of unity among the major industrial nations, declined in domestic and overseas trading Monday.

Gold prices, meanwhile, rose slightly. Republic National Bank of New York quoted a bid of $385.80 for an ounce of gold as of 4 p.m. EDT, up from $384.70 late Friday.

During the weekend, the Group of Seven industrial nations--known as the G-7--reaffirmed their desire for stable exchange rates. Their stand brought bullish dollar traders into line, and forced the U.S. currency lower, dealers said.

“With the G-7 basically threatening the markets a little bit with their comments, it’s natural the dollar would come off here,” said Robert Ryan, senior foreign exchange trader with Irving Trust Co.

Central Banks Sell

Another factor in Monday’s trading was the entry into the market by the Bank of Japan, which had been conspicuously absent from last week’s concerted intervention by North American and European central banks.

The Japanese bank and other central banks were again selling dollars Monday to bring the U.S. currency lower, dealers said.

“The Bank of Japan’s appearance means the central banks are more coordinated in their approach toward the dollar,” one overseas dealer said.

The G-7 nations, which met in Washington on Sunday, are the United States, Japan, West Germany, France, Britain, Italy and Canada.

The dollar fell 0.29 Japanese yen in Tokyo to close at 132.26 yen. Later, in London, it was quoted at 132.08 yen and in New York, the dollar fell to 131.775 yen from late Friday’s 132.80 yen.

In London, it cost $1.6855 to buy one British pound, cheaper than $1.6875 on Friday. Sterling gained against the dollar in New York, rising to $1.6912 from late Friday’s $1.6860.

Gold Higher

Other late dollar rates in New York, compared to late Friday’s prices, included: 1.87625 West German marks, down from 1.8975; 1.64125 Swiss francs, down from 1.6625; 6.3300 French francs, down from 6.4005; 1,376.625 Italian lire, down from 1,389.25, and 1.18758 Canadian dollars, down from 1.19235.

Other late dollar rates in Europe, compared to late rates Friday, included: 1.8835 West German marks, down from 1.8940; 1.6488 Swiss francs, down from 1.6606; 6.3535 French francs, down from 6.3910; 2.1230 Dutch guilders, down from 2.1352; 1,381.50 Italian lire, down from 1,387.50, and 1.1896 Canadian dollars, down from 1.1935.

Gold rose to $386.20 an ounce on the Commodity Exchange in New York from late Friday’s $385.10.

In earlier overseas trading, gold rose in London to $385.30 from $383.75 late Friday. In Zurich, Switzerland, gold rose to $385.25 from $383.60.

In Hong Kong, gold rose 96 cents to close at $387.28.

Silver bullion prices rose on the London market where the metal traded at a late bid of $5.80 an ounce, compared to Friday’s $5.79.

In New York trading, silver edged up to $5.788 from $5.778 on the Commodity Exchange late Friday.