Newspaper article THE JOURNAL RECORD

Dollar Surges; Gold Falls

Newspaper article THE JOURNAL RECORD

Dollar Surges; Gold Falls

Article excerpt

NEW YORK (AP) - The dollar surged in foreign exchange Monday, reaching more than 2-year highs against several key currencies in sometimes-hectic worldwide trading, despite continued central-bank intervention.

Gold prices declined. Republic National Bank of New York said a troy ounce of gold was bid at $374.10 as of 4 p.m. EDT, down $2.15 from late Friday.

Currency dealers said several factors helped strengthen the dollar, including firmness in U.S. interest rates and political instability in Japan due to Prime Minister Noboru Takeshita's scandal-plagued resignation.

Corporate currency buyers and speculators also have been encouraged by the dollar's ability to shrug off last week's strong intervention by central banks, dealers said.

They said reports of moderate dollar-selling by the Bank of Japan and the Federal Reserve throughout the trading session Monday also did little to change market sentiment toward the dollar.

``It's clearly the preferred investment vehicle right now for global investments,'' said Earl I. Johnson, a trader at Harris Trust & Co. in Chicago. ``It's kind of developing a bandwagon effect.''

The dollar was strongest against the West German mark in U.S. dealings, reaching a nearly 2 1/2-year high. It also rose sharply against the Japanese yen and British pound, although profit-taking brought it down from its highs of the day.

In Europe, the dollar reached a 34-month high against the Swiss franc, 28-month highs against the West German mark and the French franc, a 19-month high against the British pound and an eight-month high against the Italian lira.

All European markets, except in Britain and Italy, were closed Monday for the Pentecost holiday. …

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