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CURRENCY : Dollar Eases in Light Trading; Gold Climbs

November 20, 1987|Associated Press

NEW YORK — The dollar edged lower in quiet trading Thursday as traders eyed faltering budget negotiations in Washington with increasing pessimism that they said could spark a new selloff of the currency.

Gold prices rose slightly. Republic National Bank in New York at 4 p.m. EST quoted gold bullion at $464.90 an ounce, up 90 cents from late Wednesday.

Currency traders said the dollar generally moved in accordance with the latest reports from the Washington budget negotiations, where the White House and Congress were attempting to hammer out a plan to cut the federal deficit.

There were conflicting statements over the likelihood that a plan would be reached by today, when $23 billion in spending cuts take effect automatically under the Gramm-Rudman budget law.

President Reagan has been pushing for negotiators to meet today's deadline, but indications were that Congress was far from agreement. Some negotiators indicated that the talks could drag on for weeks, and the House leadership began attempting to delay implementation of the automatic cuts.

Analysts said the markets already were pessimistic that any plan would result in cuts significantly greater than those under Gramm-Rudman. In addition, further delays after a month of haggling heightened the sentiment that for all its talk, the government was doing nothing to solve the problems posed by the massive federal debt.

"The markets generally don't like uncertainty, and I'm surprised the dollar's performance was as good as it was today," said James McGroarty, a vice president with Discount Corp.

In Tokyo, where trading ends before Europe's business day begins, the dollar fell to 134.85 Japanese yen from 136.05 at Wednesday's close. Later in London, the dollar traded at 135.15 yen and in New York, the dollar slipped to 135.225 yen from late Wednesday's 135.50 yen.

The British pound rose to $1.7795 in London from $1.7701 late Wednesday. In New York, sterling rose to $1.7785 from Wednesday's $1.7740.

Other late dollar rates in New York, compared to late Wednesday's rates, included: 1.6804 West German marks, down from 1.68475; 1.3775 Swiss francs, down from 1.3835; 1.31075 Canadian dollars, down from 1.31615; 5.69625 French francs, down from 5.7140, and 1,236.50 Italian lire, down from 1,238.50.

Late dollar rates in Europe, compared to late rates Wednesday, included: 1.6800 West German marks, down from 1.6865; 1.3760 Swiss francs, down from 1.3835; 5.6995 French francs, down from 5.7180; 1.8915 Dutch guilders, down from 1.8985; 1,236.50 Italian lire, down from 1,238.75, and 1.3108 Canadian dollars, down from 1.3150.

Gold bullion for current delivery rose to $465 an ounce on the New York Commodity Exchange from $463.90 at Wednesday's close.

Gold rose in London to a late bid of $465 from $463.25. In Zurich, gold rose to a bid of $465.50 from $464.

Earlier, in Hong Kong, gold rose 26 cents an ounce to close at $465.49.

Silver bullion prices rose on the London market to a late bid of $6.60 an ounce from Wednesday's $6.59. On New York's Comex, silver for current delivery rose to $6.566 from $6.614.

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