Newspaper article THE JOURNAL RECORD

Dollar Extends Decline; Gold Up despite Yamani Remarks concerning Oil

Newspaper article THE JOURNAL RECORD

Dollar Extends Decline; Gold Up despite Yamani Remarks concerning Oil

Article excerpt

NEW YORK (AP) - The dollar extended its decline against most other major currencies in worldwide trading Wednesday despite some improvement in the U.S. economic outlook.

But the dollar did manage to stem its recent slide against the British pound. Sterling fell on fears of lower world oil prices following comments by Saudi Arabia's oil minister that his country plans to nearly double its oil production.

The remarks by Sheik Ahmed Zaki Yamani also halted a rise in gold prices in the United States, although the metal closed higher on the day. Republic National Bank in New York quoted gold as of 4 p.m. EDT at $326.50 a troy ounce, up $2 from Tuesday's late bid.

The dollar lost ground in Europe despite the Commerce Department's report that its key gauge of future U.S. economic activity, the Index of Leading Indicators, rose 1 percent in June, its biggest increase since January.

But the department also revised the index's gain in May to a mere 0.1 percent from the originally reported 0.7 percent.

""It was the May revision of the leading indicators that momentarily damaged the dollar, at least in Europe,'' said a trader in Frankfurt.

In a separate report, the Commerce Department said new orders to U.S. factories climbed 1.9 percent in June after rising 2.1 percent in May.

Despite economists' predictions that the American economy will improve in the second half of 1985, dealers said the foreign-exchange markets have taken a generally bearish attitude toward the economy and hence the dollar. Traders also cited the large U.S. budget and trade deficits as putting downward pressure on the U.S. currency.

Perhaps reflecting that view, prices of foreign currency futures - except for the pound - finished higher on Chicago's International Monetary Market on Wednesday.

In the London cash market, the pound dropped to $1.4160 from $1.4275 late Tuesday, and in U.S. dealings sterling fell more than a cent to $1.4125 from $1.4255.

The pound fell after Saudi Arabia's Yamani, in an interview with the newspaper Arab News, said his nation intends to almost double oil production to 4. …

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