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CURRENCY : Dollar Gains on Intervention Rumors

October 28, 1988|Associated Press

NEW YORK — The dollar ended mostly higher Thursday after a seesaw session influenced largely by rumors of central bank support, but money dealers said the underlying trend for the U.S. currency is down.

Gold prices eased in New York after strengthening in Europe. Republic National Bank quoted bullion at $407.50 an ounce as of 4 p.m. EDT, down from $408.15 at the same time Wednesday.

Currency dealers said the dollar weakened early in the day based on its sharp decline Wednesday, when a government report of slower-than-expected U.S. economic growth depressed the dollar to the lowest level in four months.

But rumors quickly surfaced that the Bank of Japan had intervened by buying dollars to support the currency. Traders said there were other rumors, later denied, that the Swiss and West German central banks were buying dollars.

The dollar strengthened on those rumors although it lost ground to the British pound, which surged on news of Britain's narrowing trade deficit.

"We actually saw the dollar move in a relatively wide range," said David Jacques, senior corporate dealer at the New York branch of Barclays Bank PLC. "Most of the movement on the back of unconcrete information."

Zlatko Glamuzina, a senior trader for the New York branch of Banco di Sicilia, said that because of the rumors and the dollar's upward move, "we lost the drive to push the dollar down."

Many Expect Decline

Although he predicted that the dollar would rise more over the next few days, "there are quite a few people who expect the dollar to go lower."

In Tokyo, the dollar fell 0.90 Japanese yen to 125.90 yen. Later in London, it slipped further to 125.75 yen. But by the time trading ended in New York, the dollar had rebounded to 126.08 yen, higher than its 125.70-yen value Wednesday.

The British pound rose in London to $1.7695 from $1.7600 on Wednesday. Later in New York, the pound fetched $1.7675, higher than its $1.7610 value Wednesday.

Other late dollar rates in New York, compared to rates late Wednesday, included: 1.7783 West German marks, up from 1.7750; 1.4982 Swiss francs, down from 1.5041; 1.2050 Canadian dollars, up from 1.1993; 6.0680 French francs, up from 6.0595, and 1,323.12 Italian lire, up from 1,322.00.

Other late dollar rates in Europe, compared to rates late Wednesday, included: 1.7725 West German marks, down from 1.7745; 1.4915 Swiss francs, down from 1.5065; 6.0455 French francs, down from 6.0725; 1.9977 Dutch guilders, down from 2.0005; 1,320.00 Italian lire, down from 1,323.50, and 1.2024 Canadian dollars, up from 1.1988.

In gold trading, the Commodity Exchange in New York quoted bullion for current delivery at $407.60 an ounce, down 70 cents.

Earlier in London, gold rose 45 cents to $407.50; in Zurich, Switzerland, it rose 10 cents to $407.20, and in Hong Kong, it fell 54 cents to $409.22.

Silver bullion for current delivery fell 2.4 cents an ounce to $6.20 on the New York Comex. In London, silver fetched $6.22, unchanged from Wednesday.

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