The dollar came under renewed pressure in foreign exchange markets yesterday for the second day in a row despite reportedly large central bank intervention.
But the traders said it was premature to say that a new speculative attack against the dollar was building, and indicated that much of yesterday's slide was due to commercial rather than speculative sales of dollars.
"There is some skepticism, in particular in Europe," said one trader for a larger U.S. bank, commenting on the response to the U.S. arsenal of dollars defense measures unveiled last week by President Carter.
"But I just don't think there's any reason to say that the jackals are waiting again," he added. "At least I hope not, because the jackals are going to lose. The central banks are quite adamant that they are not going to give in to the speculative pressures in the short run."
Gold meanwhile continued its rebound, but gave ground later in the day. The morning fixing was $221.75 an ounce in London, but it dropped to $218.80 in the afternoon. Gold had closed in London at $216.375 the day before.
In New York, Englehard Minerals and Chemicals Corp. set its base price for gold at $219.10, up $8.80 an ounce from Monday. Gold hit an all-time high of $245 an ounce last week, but dropped back as law as $210 on the announcement of increased gold sales by the U.S.
The dollar drop began in Japanese and European currency markets, but strengthened in later trading in New York.
Central banks in West Germany, Switzerland, Japan and the U.S. intervened actively to help the dollar, but reduced their participation when it became apparent that much of the dollar sales were related to commercial orders.
"In spite of the measures coming out of Washington, there are still dollars, sloshing around, and occasionally we can expect to see some selling in the market, especially after a rise of 10 percent," said one foreign exchange specialist.
Tokyo dealers estimated that the Bank of Japan has purchased more than 1 billion dollars in the last four days. But it was unclear whether the bank was acting solely for itself or in concert with other banks.
"The central banks are trying to give the impression to speculators that any one of them can intervene anywhere at any time," said one trader.
The dollar closed in New York at 1.88 West German marks compared with a rate of just under 1.90 the day before. It had been as low as 1.8762 in Frankfurt.
Against the Japanese currency, the dollar finished at 187 yen in New York, down from 190 on Tuesday, but up from earlier rates close to 186 quoted in Tokyo.
News services reported the following:
One dealer said the test for the dollar would come in the next day or two when expected dollar selling in Japan and Europe would sow whether Carter really intends to defend the dollar.
Another dealer noted that exporters have been selling dollars heavily over the past few days, and would continue to do so as long as the trade balance is in Japan's favor.
Sterling generally eased on commercial sales as well as concern over the industrial strife and the assault on the British government's 5 percent pay policy. It firmed 30 points at $1.9740, but its tradeweighted average against a basket of currencies fell to 62.2 from 62.6 late Tuesday. The effective rate was at its lowest point in two weeks.
In Zurich, the dollar fell to 1.6170 Swiss Frans from 1.6405 Tuesday. Other European closing prices: Paris, 4.30 French francs, down from 4.3125; Brussels, 30.20 Belgian francs, down from 30.635; Amsterdam, 2.0315 guilders, down from 2.0495; and Milan, 835.35 lire, down from 840.45.