Dollar Mostly Up After Falling in Reaction to Democratic Victory
NEW YORK (AP) _ The dollar rebounded against most foreign currencies Wednesday after falling in reaction to the Democratic victories in the U.S. elections, and traders attributed the rally largely to speculative buying.
Gold prices declined. At Republic National Bank in New York, gold was quoted at $406.25 an ounce as of 4 p.m. EST, down from $408.75 late Tuesday.
The dollar initially fell in early Asian dealings as it became apparent the Democrats would take control of the U.S. Senate, raising questions about the effectiveness of the Reagan administration’s economic policies. Later however, traders bought dollars and drove the price back up.
″There was pretty sizable speculative buying in European markets,″ said Alfred Driever, a currency trader for the investment firm of Salomon Brothers Inc. in New York. ″There was no particular reason.″
Others said there was some feeling that a Democratic-controlled Senate would not necessarily hamper Reagan’s administration, which also helped the dollar rebound.
In Tokyo, where trading ends before European dealings begin, the dollar dipped to 163 Japanese yen, down from 163.60 yen on Tuesday. Later in London, the dollar rose to 164.45 yen. In New York, the dollar was quoted at 164.12 yen, down marginally from 164.13 yen late Tuesday.
The British pound rose in London for the fourth straight trading day, reaching $1.4210 from $1.4155 late Tuesday. Later in New York, sterling fetched $1.4283, higher than the $1.4165 quoted late Tuesday.
Other late dollar rates in New York compared with late Tuesday levels included: 2.0661 West German marks, up from 2.0591; 1.7243 Swiss francs, up from 1.7170; 1.3883 Canadian dollars, down from 1.3893; 6.7255 French francs, up from 6.7166; and 1,427.50 Italian lire, up from 1,422.50.
Selling by professionals pushed gold lower on bullion markets. At the Commodity Exchange in New York, bullion for current delivery was quoted at $406.90 a troy ounce, down $2.40 from Tuesday.