Newspaper article THE JOURNAL RECORD

Report on Trade Deficit Takes Toll on Currency; Gold Down

Newspaper article THE JOURNAL RECORD

Report on Trade Deficit Takes Toll on Currency; Gold Down

Article excerpt

NEW YORK (AP) - The dollar continued to fall Thursday as the government's report of a widening in the U.S. trade deficit continued to take its toll on the currency.

The price of gold also dropped. Republic National Bank in New York reported a bid of $456.00 for a troy ounce of gold as of 4 p.m. EDT, down $1 from Wednesday.

``The sentiment has gotten a little more bearish than it had been as people focus on the ongoing trade problem,'' said James T. McGroarty, a vice president with Discount Corp. in New York.

The Commerce Department reported Aug. 14 that the June trade deficit widened to $15.71 billion, an apparent record. On Wednesday, the department said the deficit swelled to an all-time high of $39.5 billion in the second quarter.

Ted Wolicki, a trader with Continental Illinois National Bank & Trust Co. in Chicago, said the trade figures and subsequent decline of the dollar have created a snowball effect causing the currency's drop to continue.

``People think it belongs lower,'' he said.

Furthering the dollar's decline was the lack of any official statement from the Reagan administration that the currency had fallen far enough, the analysts said.

The Reagan administration favors a lower dollar as a way to lessen the trade deficit. When the dollar is down, imports are more expensive, but U.S. goods are cheaper for buyers in other countries.

In European trading, dealers said the dollar's decline was held in check by fears of central bank intervention or a flareup in the Persian Gulf.

In London, the British pound rose to $1.6275 from $1.6135 Wednesday, boosted by rebounding oil prices. Britain's is the world's fifth-largest oil exporter. …

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