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Traders' Uneasiness Cited as Dollar Finishes Mixed

February 25, 1987|Associated Press

NEW YORK — The dollar turned lower against most key currencies in U.S. trading Tuesday after firming up overseas, reflecting an uneasiness among dealers to take any major positions following a weekend currency accord in Paris.

Gold prices were mostly off. Republic National Bank in New York quoted a late bid of $402, down from $402.50 late Monday.

The dollar had strengthened in Europe and Japan, but it fell by midday in the United States on what most dealers termed technical factors.

"There was no great deal of (economic) news that I saw that would account for the move down," explained James Vick, vice president and senior corporate trader for Manufacturers Hanover Trust Co. in New York.

He said a number of traders had bought into the market attempting to push the dollar higher, but liquidated their portfolios after running into some resistance. "It was just backing out," Vick said.

Dealers said the market has been trading in a fairly narrow range following the weekend accord in Paris in which the United States and its five key trading partners agreed to help stabilize currency exchange rates.

At the meeting, finance minsters from Britain, France, West Germany, Canada, Japan and the United States signaled their readiness to intervene to steady the dollar, which has lost more than 40% of its value against major currencies since 1985. It was a fear of intervention that kept the dollar higher overseas, analysts said.

But Alfred Driever, a currency trader and vice president at Salomon Bros. in New York, said, "I think the market needs a few more days to think about last weekend and think about where it would like to position itself.

"I don't really see any strong motivation in the market at all," he said. "I'm looking for the dollar to remain in a range for a short time hence."

Ronald Holzer, chief currency dealer at Harris Trust & Co. in Chicago, said many traders were awaiting Friday's scheduled release of the government's January trade merchandise figures.

"I think prior to the trade figures . . . the dollar will have trouble moving a lot higher," he said.

In Tokyo, the dollar edged higher against the Japanese yen after falling for two days. It closed at 153.79 yen, up from Monday's close of 153.55 yen. Later, in London, the dollar fetched 153.95 yen. In New York, it stood at 153.67 yen, down from 153.68 yen.

The British pound was quoted at $1.5400 in London, unchanged from late Monday. In New York, sterling fetched $1.5385 vs. $1.5395.

Other late dollar rates in Europe, compared to late Monday, were: 1.8395 West German marks, up from 1.8300; 1.5565 Swiss francs, up from 1.5467; 6.1345 French francs, up from 6.0900; 2.0825 Dutch guilders, up from 2.0665; 1,311.25 Italian lire, up from 1,300.625; and 1.32975 Canadian dollars, down from 1.33120.

Other late dollar rates in New York, compared to late Monday, included: 1.8310 West German marks, down from 1.8390; 1.5465 Swiss francs, down from 1.5545; 1.33072 Canadian dollars, down from 1.33302; 6.0915 French francs, down from 6.1230, and 1,300.251 Italian lire, down from 1,300.625.

Gold, meanwhile, traded in London at a late bid of $401.90, down from $403.75 late Monday. In Zurich, gold was quoted at a bid of $402, down $1. Earlier, in Hong Kong, gold had closed at a bid of $403.10, down from $405.77.

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