The dollar drifted lower today, as dealers awaited clarification on the outlook for the economy from government reports. Gold eased in New York after gaining in Europe.
The British pound posted another day of strong gains, picking up more than 2 cents in Europe and more than 3 cents in New York trading. In London, it cost $1.3775 to buy one pound, up from Friday's $1.3552. In New York, a pound cost $1.3905, vs. $1.3603 on Friday.
"Sterling seems to be the calalyst," said Mark Biagini, vice president in charge of futures at the Bank of America's trading center here. "People are speculating in it. It seems to be driving the dollar."
Biagini said Friday's remarks by Henry Kaufman, Salomon Bros. Inc.'s chief economist, also "had a like factor" behind today's trading activity. European traders also attributed the dollar's decline to Kaufman's comments.
Kaufman said he expected interest rates to fall. He said the U.S. Federal Reserve was unlikely to tighten credit because of slowing economic growth. Lower interest rates hurt the dollar by making it less attractive to investors.
"Kaufman spoke out what many market participants quietly have been thinking for some time," said one Frankfurt currency trader, "namely, that the U.S. economy isn't likely to do as well as the Washington administration says it will in the second half of 1985 ."
Biagini said "it looks like we are on a trend downwards" with "no immediate reversal in sight" for the dollar.
"People feel they don't have to worry about the top side any more," he said.
As the trading day opened in Tokyo, the dollar closed at 237.30 Japanese yen, down from 237.95 yen Friday. Later, in London, the dollar was quoted at 237.25 yen. In U.S. trading, the dollar fell to 236.68 from Friday's 237.68.
European closing rates compared with the previous session, with late New York prices and comparable Friday rates in parentheses:
Frankfurt, 2.7984 marks, down from 2.8313 (2.7839 vs. 2.8065); Milan, 1,879 lira, down from 1,895.40 (1,869.15 vs. 1,872.65); Zurich, 2.3043 Swiss francs, down from 2.3490 (2.2914 vs. 2.3105); Paris, 8.55 francs, off from 8.6760 (8.5106 vs. 8.5689).