NEW YORK — The dollar ended a week of historic losses Friday by dropping to its lowest level in almost four years against the Japanese yen.
But the dollar turned in a mixed performance in quiet trading against major European currencies.
Gold prices were little changed Friday but wound up the week with a gain of $9.30 an ounce.
Activity was quiet in global foreign exchange and bullion markets because New York financial markets shut down as a safety precaution as Hurricane Gloria swept through the Northeast.
Gloria was just the latest storm in a turbulent week for dollar traders.
On Sunday, in a surprise move, the top finance officials of the United States, Britain, Japan, France and West Germany announced an agreement to work together to reduce the dollar's value against other key currencies in an attempt to counter a growing drive in Congress to erect new trade barriers.
As a result, when markets opened Monday, the Federal Reserve Board's measure of the dollar against 10 other leading currencies plummeted 4.29%.
On Thursday, the Fed's trade-weighted index of the dollar had dropped 7.36% from a week earlier, another record since exchange rates began floating.
The biggest beneficiary of the latest assault on the dollar has been the Japanese yen.
Ronald Holzer, chief currency trader at Harris Trust & Savings Bank in Chicago, said it appears that the finance ministers had agreed that a stronger yen should be a major goal of the drive against the dollar.
In Tokyo, where trading ends as Europe's business day begins, the dollar fell to 220.80 yen Friday from 222.80 yen Thursday and 242 yen last Friday, representing a plunge of 8.8% in the past week.
Later Friday, in London, the dollar was quoted at 218.50 yen, and by the end of the trading day in the United States, the dollar had slipped to 217.65 yen from 221.10 yen late Thursday. The Federal Reserve said it was the yen's highest value since Nov. 30, 1981, when the dollar stood at 214.20 yen.
Dealers in Tokyo said it was not clear if the Bank of Japan had intervened against the dollar Friday, but, earlier in the week, the central bank sold more than $1 billion of its holdings.
The rapid rise of the dollar between 1980 and early 1985 was a major factor holding back sales of U.S. farm products and manufactured goods in international markets. The rising dollar had priced those goods out of the market and made imports bigger bargains to American consumers.
Japanese producers had been big winners from that trade imbalance.
Currency traders in Europe said the dollar received some support Friday from a government report that the U.S. foreign trade deficit narrowed to $9.9 billion in August from $10.5 billion in July and $13.4 billion in June.
Commerce Secretary Malcolm Baldrige said he expected the trade gap, estimated to reach a record $150 billion this year, would narrow slightly in 1986.
Some European traders said they remained hesitant to buy dollars because of fears that the finance ministers might take further action against the currency.
In London, the dollar rose substantially against the British pound, with sterling tumbling to $1.4075 from $1.4405 on Thursday. At the end of the previous week, the pound was quoted at $1.3695.
Later Friday in the United States, sterling was quoted at $1.4030, against $1.4195 late Thursday.
Other late dollar rates in Europe, compared to late rates Thursday (with last Friday's rate in parenthesis), included: 2.6688 West German marks, up from 2.6583 (2.8595); 2.1950 Swiss francs, up from 2.1775 (2.3525); 8.1750 French francs, up from 8.1250 (8.7250); 3.0200 Dutch guilders, up from 3.0115 (3.2165); 1,808.00 Italian lire, up from 1,800.00 (1,922.50), and 1.3661 Canadian dollars, up from 1.35835 (1.37625).
Dollar rates in the United States as of 3 p.m. EDT Friday, compared to rates in New York following the 4:30 p.m. EDT release Thursday of the Federal Reserve Board's money supply report, included: 2.6745 West German marks, down from 2.68225; 2.1945 Swiss francs, up from 2.1925; 8.1600 French francs, down from 8.18135, and 1.36525 Canadian dollars, up from 1.3615.
Gold fell the equivalent of $2.67 in Hong Kong to close at a bid of $328.54 an ounce.
In Europe, gold bullion fell 75 cents in London to a late bid of $328 an ounce, and gold fell 50 cents in Zurich to $329 an ounce.
In abbreviated trading on the New York Commodity Exchange, gold bullion for current delivery rose 50 cents to close at $328.40 an ounce.