The spectacularly strong U.S. dollar set a flock of high records yesterday, hitting its best level against the German mark in five years, against English money in more than four years, and continuing well over the 6-franc level in Paris.
The records were set despite intervention by several central banks at a level that was described as "modest." Against the mark, the dollar scored its widest gain, an increase of 11/2 percent, a spectacular movement for a currency in a 24-hour period.
Political problems in Europe, rumors of devaluation of the French franc, coupled with the relative stability of the U.S. economy were all factors in the dollar's impressive performance against other paper currencies and against gold, which continued to trade under $400 an ounce in all major markets.
Dealers cited "saber-rattling" by the Soviets in Poland and by President Reagan, who announced that the United States would produce and store neutron bombs. "As always, when there is saber-rattling abroad, people go into the dollar," a Paris banking analyst said.
In Paris, where the dollar has been above the magic 6-franc level since last Thursday, the political tensions pushed the dollar to as much as 6.1915 during the day, closing at 6.18375 francs, up from 6.0775 on Friday. The franc was also affected by persistent rumors that the French currency would have to be devalued against the others in the European Monetary System.
In Frankfurt, the dollar opened at 2.55775 marks, up from 2.539 at Friday's close, thus reaching the best level since January 2, 1976. After hitting 2.58 marks, the dollar closed at 2.57525 marks, up from 2.539 on Friday. The neutron bomb decision was expected to create additional difficulties for Helmut Schmidt's already troubled government. In addition, tensions over Poland were another disturbing factor.
The dollar was at its best level in London since October 1977. After sliding below $1.76 at midday, the British pound closed at $1.7705, off from $1.7915 Friday. The Polish situation was said to be the main factor in the weak London market yesterday.
Neither gold nor silver proved to be a refuge for nervous traders. Vincent Tese, partner in James Sinclair & Co. trading firm, told United Press International there was "a universal lack of interest in metals despite lower interest rates and the political upheaval."
In Zurich gold fell to $393.50 an ounce from $396.50 Friday. In London it slipped to $396 from $399. In New York gold rallied from that level to close at $397, still down 50 cents from Friday's close. The New York Commodity Exchange settled gold at $397.30, up from $396.50.
Silver rose to $8.63 an ounce from $8.535 and it settled on the Comex at $8.655, up from $8.535.
In Milan, the dollar rose to 1,271.95 lira, up 19 lira.
In Zurich the dollar was worth 2.20875 Swiss francs, up from 2.189, and in Brussels it leaped to 45.75 Belgian francs from 45.45.
In Tokyo the dollar rose to 237 yen from Friday's 236.30, but it fell back to 236.10 in New York.
Other late New York dollar rates: 2.5705 German marks, 2.2010 Swiss francs, 1,268 Italian lire, 6.16 French francs, 42.11 Belgian francs.