YOU ARE HERE: LAT HomeCollections

CURRENCY : Pessimism Pushes Dollar Down

November 19, 1987|Associated Press

NEW YORK — The dollar fell Wednesday as foreign exchange markets waited for an agreement in Washington to cut the federal budget deficit.

Gold prices edged lower. Republic National Bank of New York reported a bid of $464 an ounce, down from $464.50 late Tuesday.

The currency markets have been anxiously awaiting word from Washington that the White House and Congress have agreed on cuts in the 1988 budget deficit. The two sides began working on deficit reductions in hopes of calming financial markets after the stock crash last month.

But the markets waited in vain again Wednesday, and the dollar fell in response to pessimistic comments from congressional leaders, said Robert Ryan, senior foreign exchange trader with Irving Trust.

The currency markets remain highly sensitive to such comments, said Jack Barbanel, a vice president at Gruntal & Co.

"Everyone's expecting to get this wonderful budget package, but if it's weak or nebulous, I think the dollar is going to start heading south again," Barbanel said.

The dollar fell sharply in Europe on pessimism over the budget deficit, dropping more than a pfennig against the West German mark. It bounced back somewhat toward the end of the session, closing at 1.6865 marks, down from 1.6950 late Tuesday. In New York later, the dollar fell to 1.68475 marks from 1.6906 marks late Tuesday.

Other late dollar rates in New York, compared to late Tuesday's rates, included: 1.3835 Swiss francs, down from 1.38575; 5.7140 French francs, down from 5.7300; 1,238.50 Italian lire, down from 1243.00, and 1.31615 Canadian dollars, down from 1.31745.

Other late European dollar rates, compared to rates late Tuesday included: 1.3835 Swiss francs, down from 1.3900; 5.7180 French francs, down from 5.7267; 1.8985 Dutch guilders, down from 1.9080; 1,238.75 Italian lire, down from 1,243.00, and 1.3150 Canadian dollars, down from 1.3175.

The British pound climbed to $1.7701 from $1.7605 in London trading.

Tables, Page 10

Los Angeles Times Articles