Currency : Dollar Finishes Firm on Market Sentiment

The dollar finished firmer against most major currencies except the Japanese yen Tuesday, pushed aloft by favorable market sentiment toward the U.S. currency.

Gold prices edged lower in U.S. trading, reversing course after moving up on markets overseas. Republic National Bank of New York quoted a bid of $384.90 for an ounce of gold, down from Monday’s late bid of $385.20.

The dollar’s increase came despite intervention by the Federal Reserve. Dealers in New York said the U.S. central bank sold dollars at one point but the dollar ended the day near its highest levels of the session anyway.

Bob Morrissey, senior trader in the Bank of Boston’s New York office, said trading was somewhat subdued, probably because managers of corporate currency portfolios and other dealers are taking a wait-and-see attitude ahead of potentially market-moving government statistics due later this week.

The Commerce Department reports on March retail sales Thursday and the Labor Department issues the producer price index the following day.

“It really was a fairly quiet day,” Morrissey said. “The dollar was fairly well bid and closed near its highs of the day. There were really no factors except market sentiment that pushed it higher.”

The dollar benefited from a weakening in the British pound on news that the United Kingdom’s largest labor union, the Transport and General Workers, may strike to protest the government’s intention to end the system of guaranteed work for longshoremen.

In London, one British pound cost $1.6995 late Tuesday, unchanged from Monday. But by the time trading was done for the day in New York, the pound had lost ground and was quoted at $1.6910, compared to $1.6955 late Monday.

Earlier, the dollar closed in Tokyo at 132.62 Japanese yen, up from 132.53. In London late Tuesday the dollar traded lower at 132.55 and in New York it wound up at 132.705, down from 132.90.

Other late dollar rates in New York, compared to Monday’s late rates, included: 1.88525 West German marks, up from 1.88325; 1.66375 Swiss francs, up from 1.66075; 6.3655 French francs, up from 6.35675; 1,381.375 Italian lire, up from 1,379.45, and 1.18945 Canadian dollars, unchanged.

Other late rates for the dollar in Europe, compared to Monday’s late rates: 1.8825 West German marks, up from 1.8785; 1.6582 Swiss francs, up from 1.6565; 6.3535 French francs, up from 6.3425; 2.1225 Dutch guilders, up from 2.1200; 1,379.25 Italian lire, up from 1,378.50, and 1.1888 Canadian dollars, down from 1.1890.

Gold prices were mixed.

In New York, an ounce of gold for current delivery ended at $385.80 an ounce on the Commodity Exchange, down from Monday’s price of $386.

The late gold bid price in London, the major market, was $385.25 an ounce, up from $382.45 late Monday. The Zurich late bid price was $385.00, up from $381.50.

Earlier, Hong Kong gold closed at $385.35, up from $381.85.

Silver bullion traded late in London at $5.84 bid an ounce, up from $5.77.

Silver for April delivery rose on New York’s Comex, settling at $5.834 an ounce, up from $5.821 on Monday.