Newspaper article THE JOURNAL RECORD

Dollar, Gold Both Rise Early, Then Fall Back

Newspaper article THE JOURNAL RECORD

Dollar, Gold Both Rise Early, Then Fall Back

Article excerpt

NEW YORK (AP) - The dollar, which rose earlier in Europe, retreated against major foreign currencies in the United States on Tuesday as interest rates softened.

Trading was quiet. Traders were awaiting the Commerce Department's latest report on the U.S. gross national product, which was scheduled to be released Wednesday.

Gold bullion fell back, too, after gaining nearly $5 earlier in Hong Kong. Bullion was quoted at $425 an ounce at 4 p.m. EDT at Republic National Bank in New York, down $1 from Monday's late bid.

Currency traders in Europe said the dollar was still being underpinned by remarks Monday by Karl Otto Poehl, president of West Germany's central Bundesbank, who signaled a willingness to intervene in support of the dollar. Poehl said at a London business meeting that he felt the dollar's decline had gone far enough.

Later, Earl Johnson, a trader at Harris Trust & Savings Bank in Chicago, said: ""That (factor) seems to have eased here now.''

Robert Paul, foreign exchange manager at the Bank of Boston, said: ""Interest rates seemed a little softer and the dollar softened along with the interest rates.''

Lower interest rates make dollar-denominated investments less attractive.

Paul added: ""Everybody is waiting impatiently for the GNP figure that will be coming out tomorrow.''

Traders are expecting the department to report that third-quarter GNP grewe between 1.5 percent and 2 percent, Johnson said.

Johnson said it would take a number of at least 3 percent to propel the dollar up. The number would have to be smaller than 1.5 percent to push the currency down, he said.

The British pound rose on expectations that OPEC members meeting in Geneva would reach an agreement to extend their oil production limits to support oil prices, Johnson said. …

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