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Dollar at Highs Against Pound, French Franc

January 01, 1985|Associated Press

NEW YORK — The dollar rose to all-time highs against the British pound and French franc in quiet New Year's Eve trading Monday, winding up a year in which it climbed 15%.

Both the Federal Reserve Board in Washington and Morgan Guaranty Trust Co. in New York said that their separate broad measures of the dollar's strength ended 1984 at record highs.

Gold edged lower in extremely light trading, extending its loss of value for the year to 20%, while silver was 30% below year-earlier levels.

On the New York Commodity Exchange, gold bullion for current delivery closed at $307.90 an ounce, down 10 cents from Friday. A year earlier, gold closed at $385.10 an ounce. The all-time high of $875 an ounce was reached during Comex trading on Jan. 21, 1980.

In after-hours trading at Republic National Bank in New York, gold bullion was bid at $307.75, down 45 cents from the late bid Friday.

Because of the New Year's Eve festivities and the fact that most traders already had closed their books on 1984, activity was quiet and many currency and bullion dealers closed early Monday.

George DeLuna, a trader at Irving Trust Co. in New York, said the only business was from companies who needed dollars to meet year-end obligations and that those buyers had to pay a premium for the currency.

Meanwhile, expectations of further declines in world oil prices following OPEC's year-end meeting in Geneva sent the British pound tumbling to yet another low.

The pound has been sensitive to declines in oil prices because of Britain's reliance on revenue from its huge North Sea oil reserves.

Sterling fell to a record low of $1.1560 during the morning's trading session in London before rising to close at $1.1578.

The previous record trading low of $1.15825 and previous record closing low of $1.16275 were both reached Friday in London.

Later, in New York, the pound fell to $1.15825 from $1.1645 late Friday.

The dollar closed at 9.6450 French francs, up from last Friday's 9.6225 francs and from last Thursday's previous record high of 9.6250 francs.

The dollar also hit a seven-year high against the Swiss franc and a 13-year high against the Dutch guilder.

Dealers said the low volume of trading before the New Year's Day holiday exaggerated the effects of dollar purchases.

The Federal Reserve said its index of the dollar, weighted on the basis of trade with 10 other currencies, reached a record 151.47 on Friday, up 15% from the end of 1983 and up 76.5% from five years ago. The index stood at 100 in the base period of March, 1973, and records go back to 1967.

Morgan Guaranty Trust said its trade-weighted index of the dollar against 15 other currencies was a record 30.9% higher than the average market value between 1980-82.

In Tokyo, the dollar closed at 251.58 Japanese yen, a high for the year and up from last Friday's 250.30 yen. In later London trading, the dollar was quoted at 251.25 yen, and by the end of the trading day in the United States the dollar had climbed to 251.85 yen from 250.20 yen late Friday.

Late dollar rates in Europe, compared to late rates Friday, included: 3.1525 West German marks, up from 3.1480; 2.6025 Swiss francs, up from 2.5900; 3.5610 Dutch guilders, up from 3.5555; 1,933.50 Italian lire, up from 1,926.50, and 1.3204 Canadian dollars, up from 1.32025.

Dollar rates in New York, compared to late rates Friday, included: 3.1550 West German marks, up from 3.1320; 2.5920 Swiss francs, up from 2.5785; 9.6450 French francs, up from 9.59625, and 1.32125 Canadian dollars, up from 1.31985.

Gold rose $1.23 in Hong Kong to close at $310.82 an ounce.

Gold was quoted in London at a late bid price of $308.75 an ounce, down from $309 late Friday. Zurich bullion and currency markets were closed Friday.

Silver was quoted in London at a late bid of $6.280 an ounce, the lowest price since Aug. 12, 1982, and down from Friday's $6.375.

Later, on New York's Comex, silver bullion for current delivery fell 8.8 cents to $6.295 an ounce. That compared to $9.02 at the end of 1983 and an all-time high of $52.50 an ounce during Comex trading on Jan. 21, 1980.

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