Newspaper article THE JOURNAL RECORD

Dollar Rises against All Major Currencies

Newspaper article THE JOURNAL RECORD

Dollar Rises against All Major Currencies

Article excerpt

NEW YORK (AP) - The dollar made strong gains against major currencies Tuesday amid falling interest rates in Britain and prospects of higher rates in the United States.

The British pound fell sharply. In New York it cost $1.3415 to buy a pound, more than 3 cents less than the $1.3723 it cost on Monday. In London, the pound dropped to $1.3462, compared with $1.3703Monday.

Gold was also down by at least $2 an ounce.

Currency dealers said Tuesday's start of a U.S Treasury auction of a record $21.75 billion in government securities, together with a shift out of the pound and other European currencies lent support to the rising U.S. currency.

The auction of notes and bonds, through Thursday, ""is expected to exert slight upward pressure on long-term bond yields, therefore making U.S. securities more attractive to investors,'' said Gary Dorsch, senior money market analyst at G.H.Miller and Co. in Chicago.

In addition, Dorsch said, ""traders are liquidating long dollar positions in reaction to a decline in Europe of short-term deposit rates.''

He said three-month Swiss securities were selling Tuesday at 4 7-16 percent, down from 5 1/8 percent on July 24, while ""the (West) German rate of 4 11-16 is down from 5 percent on July 23.''

""Traders were liquidating low-yielding deposits on Swiss francs and marks in favor of slightly higher-yielding Eurodollar deposits,'' he said. ""Probably this (shift into dollars) is the first reaction to that decline in rates.''

""The pound took another beating, falling in sympathy with its European counterparts about 3 cents,'' he added.

In Europe, currency dealers said investors were shifting money out of the British pound and into the dollar because of sharp declines in British interest rates in recent weeks. …

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