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CURRENCY : Technical Factors Cited in Dollar's Fall

February 10, 1988|Associated Press

NEW YORK — The dollar edged lower Tuesday against nearly all major currencies after rising overseas.

Gold prices were mixed. At Republic National Bank of New York, the late bid for gold was $441.50 an ounce, up $1.50 from Monday.

Dealers said currency trading was dominated largely by technical factors, although the dollar was hurt somewhat by a sharp decline in the federal funds rate, the interest on overnight loans between banks.

Gary Dorsch, senior money market analyst for LNS Financial Group in Chicago, said some traders fear that the Federal Reserve might ease its credit policies to stimulate the economy. Lower interest rates tend to weaken a currency.

Bond analysts, however, attributed the drop in the federal funds rate mainly to technical reasons. The Fed's policy-making arm met on Tuesday.

Decline Against Yen

Dorsch said the dollar rose in early trading but slipped back after failing to reach some psychologically important levels. He said the market lacked commitment prior to the release of the December trade figures, which are due out Friday.

"I don't think you're going to see much of anything before Friday," he said.

In Tokyo, where the global trading day begins, the dollar fell to a closing 129.07 Japanese yen from 129.30 yen Monday. It edged back up to 129.15 yen in London. In New York, the dollar stood at 128.82 yen, down from 128.935 yen.

In London, the British pound fell to $1.7425 from $1.7550 late Monday. Sterling fetched $1.75225 in New York, up from $1.7494.

Other late dollar rates in New York, compared to late Monday's prices, included: 1.69575 West German marks, down from 1.70115; 1.3880 Swiss francs, down from 1.3917; 1.26815 Canadian dollars, up from 1.2668; 5.7225 French francs, down from 5.7410, and 1,247.50 Italian lire, down from 1,250.75.

Late dollar rates in Europe, compared to late Monday's prices, included: 1.7030 West German marks, up from 1.7010; 1.3950 Swiss francs, up from 1.3875; 5.7455 French francs, up from 5.7265; 1.9120 Dutch guilders, up from 1.9085; 1,253.25 Italian lire, down from 1,253.32, and 1.2665 Canadian dollars, up from 1.2655.

At the New York Commodity Exchange, gold bullion for current delivery rose to $441.60 an ounce from $440.40 late Monday.

Gold dropped to a late bid price of $439.25 in London from $443.50. In Zurich, Switzerland, gold fell to $439.50 bid from $442.50.

Earlier, in Hong Kong, gold rose to a closing bid of $443.64 from $443.13.

Silver prices declined. At the New York Comex, silver bullion traded at $6.265 an ounce, down from $6.297 late Monday. Silver fell in London to a late bid price of $6.24 from $6.34.

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