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Dollar Turns Mixed as Gold Advances

August 29, 1985|Associated Press

NEW YORK — The dollar was mixed against other major currencies in U.S. trading Wednesday after drifting lower on European markets.

Gold prices rose worldwide. Republic National Bank in New York quoted gold as of 4 p.m. EDT at $340.50 an ounce, up $3.75 from Tuesday's late bid.

Currency dealers described trading as relatively light and trendless, in part reflecting the mixed effect of traders making their usual end-of-the-month portfolio adjustments. But the dollar's showing also reflected the markets' uncertanty about the course of American business activity, traders said.

"We're in an in-between stage here in terms of the economy," said Ronald Holzer, chief dealer at Harris Trust & Savings Bank.

Dealers said the trend could continue at least until Friday, when the markets receive the next batch of economic reports. The government is scheduled to release July data on leading indicators, factory orders and the trade balance.

The South African rand, meanwhile, continued to trade near record lows against the dollar in light U.S. dealings.

Currency and stock trading in South Africa itself was suspended by the government Tuesday--after the rand hit a new low of 35.75 cents--in an effort to ease pressure on its currency and halt the flight of foreign capital. Trading was suspended until Monday.

The rand has tumbled from parity with the dollar over the past three years amid increasing protests by blacks of the South African government's apartheid policy.

Holzer said the rand was bid in the United States at 38 cents and offered at 48 cents, which he termed an unusually wide spread that reflected traders' growing concern about the state of South Africa's economy.

The dollar began its trading day in Tokyo by falling to 236.95 Japanese yen from 237.02 yen late Tuesday. In London, the dollar was quoted at 236.78 yen, and, in U.S. trading, the dollar fell to 236.88 yen from 237.025.

Also in London, the British pound climbed to $1.4015 from $1.3907. Dealers said a large order for sterling by an unidentified East European country boosted the pound. In U.S. dealings, sterling rose to $1.4031 from $1.3985.

Other dollar rates in Europe, compared to late Tuesday, were: 2.7665 West German marks, down from 2.7850; 2.2610 Swiss francs, down from 2.2768; 8.4425 French francs, down from 8.4975; 3.1140 Dutch guilders, down from 3.1300; 1,862.10 Italian lire, down from 1,864.15, and 1.3600 Canadian dollars, down from 1.3618.

The dollar's decline against the lira came after a drop in Italian interest rates. Six major Italian banks cut their prime rates by one percentage point to 16%.

Other dollar rates in U.S. trading as of 4 p.m. EDT and compared to Tuesday were: 2.7730 West German marks, up from 2.77135; 2.25925 Swiss francs, down from 2.2720; 8.4575 French francs, down from 8.4650, and 1.36075 Canadian dollars, up from 1.35975.

Gold prices rose partly in reaction to the unrest in South Africa, which is one of the world's largest gold producers, bullion dealers said.

In Hong Kong, gold advanced to $339.26 an ounce from $335.06 late Tuesday. Gold climbed in London to $340.00 an ounce from $334.75, and, in Zurich, gold rose to $340.00 from $336.50.

On the Commodity Exchange in New York, gold for current delivery gained $3.30 to $340.40 an ounce.

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