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Pessimism Over U.S. Trade Deficit Blamed : Dollar Skids in Late Selloff; Gold Prices Mixed

September 02, 1987|Associated Press

NEW YORK — The dollar fell against all major currencies Tuesday in a late selloff that dealers attributed to underlying pessimism about improvement in the U.S. trade deficit and an unfounded rumor that President Reagan had suffered a heart attack.

Gold prices rose in New York after a mixed showing elsewhere. At Republic National Bank, gold was quoted at $454.75, compared to $450.25 late Monday.

The dollar spent much of the day at higher levels, supported by reports of central bank intervention in Europe. But after European trading closed, brokers said, a resilient urge to sell dollars resumed.

"I think the market overall is very bearish for the dollar," said James Hohorst, managing director of foreign exchange at Manufacturers Hanover Trust Co. in New York. "If the trade deficit doesn't get better, at what point does somebody stand up in Washington and say, maybe the dollar needs to go lower?"

Currency dealers said the dollar's decline Tuesday was aggravated in late U.S. trading by a rumor that Reagan had suffered a heart attack. A White House spokesman denied the rumor.

In Tokyo, the dollar fell to a closing 141.60 Japanese yen from 142.35 on Monday. Later in London, it edged back to 141.95 yen. By the time trading closed in New York, the dollar was worth 141.45 yen, down from 142.41.

In London, the British pound rose to $1.6400 from $1.6340 in Europe late Monday. In New York, the pound fetched $1.6430, up from $1.6301. Financial markets in London and Hong Kong were closed Monday for national holidays.

Other late dollar rates in New York, compared to late Monday levels, included: 1.8090 West German marks, down from 1.8164; 1.4950 Swiss francs, down from 1.4968; 1.3174 Canadian dollars, down from 1.3197; 6.0600 French francs, down from 6.0660, and 1,315.00 Italian lire, down from 1,317.00.

Gold prices rose in New York after mixed sessions abroad.

At the Commodity Exchange in New York, gold bullion for current delivery rose $4.20 an ounce to $454.80. In London, gold rose to $453 from $452.75 bid Friday. Gold fell to $454 in Zurich from $456.

Earlier, in Hong Kong, gold dropped $3.82 from Friday to $453.09.

Silver bullion rose in London to $7.43 an ounce, up from $7.34 late Friday. On the Commodity Exchange in New York, silver bullion for current delivery was quoted at $7.327 an ounce, off 5.6 cents.

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