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Intervention Reports Dampen Dollar

October 12, 1985|Associated Press

NEW YORK — Signs of better U.S. economic health sent the dollar rising Friday, but the rally ran out of steam later in the day amid reports of central bank intervention against the U.S. currency.

Gold rose. Republic National Bank in New York quoted gold bullion at $327 an ounce as of 4 p.m. EDT, up $1.50 from the late bid Thursday.

Currency dealers said the dollar advanced sharply after the Commerce Department reported that retail sales jumped 2.7% in September, the biggest gain in five months, and the Labor Department said wholesale prices fell a steep 0.6%.

Traders said that, following the economic reports and as the dollar was rising, they detected signs that the U.S. Federal Reserve had sold dollars and bought yen and that West Germany's central bank also sold dollars. In earlier Asian trading, the Bank of Japan also sold dollars, traders said.

"I think the threat of intervention remains very real," said Paul Steinborn, an officer of Credit Suisse in New York.

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