Newspaper article THE JOURNAL RECORD

Dollar Mixed, Gold Falls

Newspaper article THE JOURNAL RECORD

Dollar Mixed, Gold Falls

Article excerpt

NEW YORK (AP) - Britain's pound dropped more than two cents against the dollar Monday because of fears about an intensified oil price war, and the U.S. currency declined for the eighth day against the Japanese yen to a 7-year low.

Gold prices fell in quiet trading. As of 4 p.m. EST, Republic National Bank of New York said gold was bid at $344 a troy ounce, down from $349 bid late Friday.

Analysts said the dollar was stronger against most currencies largely because of Commerce Department figures that showed U.S. construction spending rose 2.8 percent and factory orders rose 2.7 percent in December.

Those figures suggested the U.S. economy is growing faster than anticipated and lessens the need for the Federal Reserve Board to cut the discount rate, the fee charged to lend banks money. It has stood at 7.5 percent since May.

A lower discount rate would lead to lower interest rates and stimulate the economy, but make dollar-denominated investments less attractive.

The most dramatic action was in the pound, which dropped because of a decline in oil prices and fears of a bitter price war between Britain, the world's fifth largest exporter, and Saudi Arabia, the biggest exporter and dominant figure in the Organization of Petroleum Exporting Countries. Doubts about the outcome of an OPEC committee meeting in Vienna, Austria, has intensified the concern.

In London the pound closed at $1.3855, down from $1.4125 last Friday. By the time trading closed in New York, the pound was worth $1.3900, down from $1.4135 late Friday.

""The pound should be under residual pressure until oil finds a bottom,'' said Gary Dorsch, senior money market analyst at G.H. Miller & Co., a Chicago commodities futures firm.

The dollar fell for the eighth trading day against the Japanese yen following remarks by Finance Minister Noburo Takeshita last month that Japan could stand to let the dollar fall to 190 yen.

It closed at 190.85 yen in Tokyo, down from 192. …

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