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Dollar Closes Mostly Lower in Light Trading

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From Associated Press

The dollar ended mostly lower against European currencies today in light trading, but money brokers said an underlying appetite for the currency remained strong.

Gold prices were mixed.

The dollar, which hit two-year highs against some other key currencies Monday, picked up speed late in the day after an early afternoon lull, taking its signal from active New York trading in which traders said demand was coming primarily from investors.

European trading remained light, consisting primarily of trading between banks. No central banks intervened in the open market today.

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“The market likes the dollar so much now, it’s going to take a lot to turn it around,” one London trader said.

Unless central bank intervention is carefully timed and coordinated, the market will prove difficult to control, traders said.

“The market has proved to be more powerful than the (central) banks,” another London trader said.

In London, the dollar fell against the British pound. It cost $1.6398 to buy one pound, more expensive than the $1.6385 of late Monday.

Other late dollar rates in Europe, compared to rates late Monday: 1.9426 West German marks, up from 1.9415; 1.7360 Swiss francs, down from 1.7438; 6.5685 French francs, down from 6.5725; 2.1820 Dutch guilders, down from 2.1905; 1,408.75 Italian lire, down from 1,411.00; 1.1892 Canadian dollars, down from 1.1905.

In Tokyo, the dollar closed up 0.20 yen at 137.00 yen, despite reported intervention by the Bank of Japan. Later in London, the dollar was quoted at 137.28 yen.

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