Interest Rates Depress Dollar; Gold Rises $3.10
The U.S. dollar slipped against major foreign currencies yesterday in response to easing U.S. interest rates and strong demand for West German marks.</br></br>Gold rose $3.10 an ounce as a result of the weaker dollar, which makes dollar-denominated investments look less attractive.</br></br>Also adding to the pressure on the dollar yesterday was trader expectation of a sizable U.S. merchandise trade deficit report for February, to be announced today. The latest market expectation is that the deficit will amount to $7.9 billion and, says Daniel Holland, a vice president of Foreign Currency Management Inc., New York, "that took a little steam out of the dollar."</br></br>Mr. Holland said "the only thing that could boost the dollar this week would be a trade deficit that isn't as sizable as expected."</br></br>The dollar's decline began almost as soon as New York trading began, and it accelerated when the dollar broke through 2.5850 marks; in late New York trading yesterday, the dollar settled at 2.5713 marks.