The U.S. dollar plunged to new lows on European money markets yesterday despite a reassuring pledge from Treasury officials that the administration would intervene "vigorously" to fight off spcecultors' attacks on the currency.
Dealers and analysts blamed the plunge on statements made early in the day by Under Secretary of the Treasury Anthony Solomon. Solomon told reporters in Paris, where he is attending a meeting of monetary officials that Washington had not proped up the dollar recently because world markets had been largely inactive.
Following the confusion triggered by that remark, Solomon later issued a clarifying statement.
"In the last two to three days, the market had been disorderly," he said. "We have intervened and there has been no change in our policy whereby we will intervene vigorously to counteract the disorderly market.
The clarification apparently came too late, however.
The dollar fell to a record closing low of 1.9035 Swiss francs, down from Wednesday's 1.9172 francs, the previous record.
In Frankfort the dollar fell to 2,0675 marks, also a record closing low and more than two pfennigs lower than Wednesday's rate of 2.0861 marks.
The British pound recorded a late rate of $1.9375, up from Wednesday's $1.93285.
An ounce of gold rose to $179.65 in London, the highest price since March 6,1975, and up 40 cents from Wednesday.
In Zurich, Europe's major bullion trading center, gold closed at $179.375 an ounce, 50 cents higher than Wednesday.