Central banks dampened a sharp rise in the dollar yesterday to leave it mostly lower in New York. The British pound remained under pressure. Gold and silver were lower. Renewed speculation of a reduction in the Federal Reserve's discount rate this weekend sparked the dollar's rise at the opening in New York, which coincides with mid-day trading in Europe.
"There was a lot of business this morning, with the dollar hitting a high of 2.56 German marks," one dealer said. But another dealer said the Fed, the West German Bundesbank, and reportedly the Bank of France intervened to sell dollars at that point, bringing it down to below 2.53 marks in a short period.
The British pound remained under pressure from the prospect of lower prices for its North Sea oil, but few look for a sharp decline in its value. In London, the pound closed at $1.4107, down from $1.4370 Tuesday and more than 5 cents lower than Monday. In New York, sterling finished at $1.42, down from $1.4341.
The dollar fell sharply to $1.3883 Canadian from $1.3957.
European closing rates with late New York prices and comparable Tuesday rates in parentheses: Frankfurt, 2.5463 marks, up from 2.5418 (2.53 vs. 2.5387); Zurich, 2.1260 Swiss francs up from 2.12 (2.1191 vs. 2.1209); Paris, 7.7525 French francs, down from 7.7570 (7.7220 vs. 7.74); Milan, 1,732 lire, up from 1,728.30 (1,718.21 vs. 1,721.17).
In Tokyo overnight, the dollar rose to 203.70 yen from 203.45 and in New York it was unchanged at 203.46.