The U.S. dollar plunged to its lowest value ever on the West German currency market today as concern continues to grow over spreading anti-American animosity in the Islamic world.
Just hours before the dollar hit its record low on the Frankfurt money market, a bomb exploded in front of the Frankfurt branch of Morgan Guaranty Trust, the U.S. bank that won a German court order last week temporarily freezing the Iranian-owned shares in the giant German steel-making form of Krupp.
No one was hurt in the blast, which shattered windows but otherwise did little damage, police said.
The dollar was fixed in Frankfurt today at 1.70 marks, a sharp drop from 1.73 marks Friday. Today's decline could have been worse if West Germany's central federal bank, the Bundesbank, hadn't intervened to prop up the U.S. Currency by buying some 21.75 million dollars.
The price of gold hit a record closing level in New York and the dollar plummeted against other currencies, Associated Press reported.
The price of an ounce of gold in New York closed at $431.50 an ounce, up $14 from Friday, according to Republic National Bank. At New York's Commodity Exchange Inc., the price of gold futures for delivery in December was $432.30 an ounce, a $13.20 rise from Friday's level.
The previous high close for gold in New York was $426.25 on Oct. 2, the same day the metal set a record high of $444 an ounce in Zurich before closing at $438. Gold had traded as high as $441 an ounce in New York that day before settling back at the close.
When 1979, gold was trading at $226.80 an ounce in New York.
Gold had its best day in Europe today since the Oct. 2 rally. It rose $15.50 an ounce in London to close at $431 and $13 in Zurich to $429.
Since the gold rush in early October, brought on by worries about U.S. inflation, gold prices have subsided and were below $400 an ounce for the past two months. The metal now has risen about $35 in the past week.
Later dollar rates elsewhere in Europe, compared with Fridays late rates, were: Zurich, 1,5630, Swiss francs, off from 1.6005; Paris, 4.0165 francs, off from 4.0677; Amsterdam, 1.8990 guilders, off from 1.9285, and Milan, 807.05 lire, off from 815.07.
In London, the pound reflected Britain's near-self-sufficiency in oil by advancing to $2.2157 from $2.1995 at th nd of last week.
In Tokyo, where the oil crisis is causing grave economic problems, the Bank of Japan sold hundreds of millions of dollars to support the yen, and the dollar declined to 248.85 yen from last Friday's 249.475 yen, AP said.
The dollar has lost one-third of its value against the strong West German currecy in the past three years.
After it hit its previous record low of 1.72 marks on Oct. 31, President Carter announced a special package of measures meant to strengthen the dollar. By January, the dollar had bounded back to 1.88 marks, but began sliding again when the Iranian revolution errupted. When the dollar dropped to 1.73 marks in September, more dramatic Federal Reserve actions were announced, sending the dollar up again to about 1.82 marks by late October.