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Foreign Exchange for Tuesday, Aug. 12, 1986 : Dollar Mostly Higher; Gold Declines

August 13, 1986|Associated Press

NEW YORK — The dollar gained against most key currencies in world trading Tuesday amid speculation that central banks might be contemplating coordinated interest rate cuts.

Gold prices pulled back as investors collected profits amassed during the recent surge in the precious metal. The Republic National Bank in New York quoted gold at $385.75 an ounce as of 4 p.m. EDT, down $3.25 from Monday's late bid.

Currency dealers said the session featured discussion of possible interest rate cuts in light of weekend talks in West Germany between Federal Reserve Board Chairman Paul A. Volcker and Karl Otto Pohl, president of the West German central bank.

The dollar's rise against all major currencies except the British pound was largely due to technical maneuvers, including short covering, in which traders buy dollars to limit losses from previous sales.

The British pound benefited from reports that Kuwait would suspend sales of oil on the world market. Britain is the world's fifth-largest oil producer.

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