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Dollar Gains After Dip in U.S. Jobless Figures

May 09, 1987|Associated Press

NEW YORK — The dollar rose against most major currencies Friday, bolstered mainly by a report showing that the U.S. unemployment rate was lower than expected in April.

Gold prices weakened. Republic National Bank in New York late in the day quoted gold bullion at $454.25 an ounce, down $3 from late Thursday.

The Commerce Department reported Friday that April's unemployment rate fell to 6.3%, the lowest rate in a decade, from 6.6% in March.

"The market was expecting a decline of 0.1%, but instead it dropped 0.3%," said Didier Javice, a currency analyst at Goldman, Sachs & Co. "That gave it a firm tone today."

But Javice added that the market's bearish psychology did not seem to have changed much, "even though the Treasury auction also went very well yesterday."

Many bond and currency traders were heartened to see significant Japanese participation in the $29-billion three-day sale of Treasury bonds and notes, which could indicate a Japanese belief that the value of their investments was unlikely to erode by further declines in the dollar.

Javice noted that the dollar did not continue rallying much beyond its initial surge following the morning announcement of the unemployment figures, and he said that indicated continued bearish sentiment among traders.

Alfred Driever, a currency trader at Salomon Bros., said the dollar also was bolstered by talk that West Germany and Japan would cut interest rates next week.

"That put some uncertainty in the market--some nervousness that does support the dollar for the time being," he said.

In London, the British pound declined to $1.6735 from $1.6805 late Thursday. Britain's four major banks on Friday cut their base lending rate to 9% from 9.5%, effective Monday. Later in New York, sterling fell to $1.6745 from $1.6760 late Thursday.

In Tokyo, where trading ends before Europe's business day begins, the dollar closed at 139.80 Japanese yen, up 0.13 yen from late Thursday. Later in London, the dollar was quoted at 139.75 yen, and in New York the dollar rose to 139.75 yen from Thursday's 139.60 yen.

Other late dollar rates in New York, compared to late Thursday's rates, included: 1.7905 West German marks, up from 1.7840; 1.4715 Swiss francs, up from 1.4705; 5.9845 French francs, up from 5.9645; 1.3358 Canadian dollars, down from 1.3366, and 1,292.00 Italian lire, up from 1,284.63.

Other late dollar rates in Europe, compared to late Thursday's rates, included: 1.7915 West German marks, up from 1.7780; 1.4735 Swiss francs, up from 1.4650; 5.9875 French francs, up from 5.9505; 2.0210 Dutch guilders, up from 2.0085; 1,295.00 Italian lire, up from 1,278.75, and 1.3350 Canadian dollars, unchanged.

At the New York Commodity Exchange, gold for current delivery closed at $454.80 an ounce, down from $457.60 on Thursday.

Earlier in London, gold fell to a late bid of $455.00 an ounce, compared to late Thursday's $458.00. In Zurich, gold fell to a closing bid of $454.50, falling from $456.50 late Thursday.

Earlier in Hong Kong, gold fell $1.39 to close at a bid of $455.20.

Silver bullion prices fell on the London market to a late bid of $8.18 an ounce from late Thursday's $8.27.

At New York's Comex, silver closed at $8.289 an ounce, up from late Thursday's $8.263.

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