The dollar firmed against a broad range of European currencies and against the Japanese yen yesterday, improving from the bargain-basement levels where it started the week.
The U.N. currency finished the day marginally up against the yen, the deutshmark and the Swiss, French and Belgian frances it recovered from its record low against the Dutch guilder in Amsterdam and rallied from an 18-month low against the Italian Iira. There was further slight improvement in New York later in the day.
Gold dropped $3 an ounce to $180.375 in Zurich and $2.75 to $179.625 in London.
On the Tokyo foreign exchange market, the dollar closed at 218.35 yen. It had plunged to an all-time low of 218.15 yen at one point Monday, finishing the day at a record low closing of 218.20.
The dollar fared worst against British sterling. It costs $1.8695 to buy a pound compared with $1.8680 Monday despite the British currency's own problems. The pound slipped against European currencies following announcement of a unexpected drop of $389.5 million in Britain's reserves in March.
But dealers reported a late flurry of sterling demand from New York and the Far East, which helped stabilize the British currency.
The dollar closed at 2.0195 deutschmarks in Frankfurt against 2.0030. In Zurich, it brought 1.8730 Swiss francs against 1.8500. The French franc's post-election rally faltered, and it ended the day at 4.5725 to the dollar against 4.5650.
The dollar continued its climb from its all time low of 2.1415 guilders in Amsterdam, closing at 2.1590. It also hauled out of its 18-month low of 849.20 lire in Milan to close at 850.05.
In Brussels, the dollar brought 31.675 Belgian francs against 31.25 Monday.
Dealers said they believed there had been some support for the dollar from European central banks. Frankfurt dealers said the West German Bundesbank bought 7.6 million dollars when the U.S. currency was fixed there at 2.0088 marks, up from 2.004 Monday.
But orders at the fixing were moderate and the Bundesbank did not need to match Monday's 27.3 million-dollar intervention.
Some operators thought the Swiss national bank may have intervened to a certain extent yesterday and some Bank of England intervention was thought to have occurred to keep the pound steady.