Dollar Declines In Thin Trading Over Small Range
The dollar eased in anemic foreign exchange trading as many participants continued to sit out the market and await the new year.</br></br>The dollar barely moved from Friday's levels all day. It was supported partly by the expectation that the Group of Seven leading industrial nations will reaffirm the Louvre currency-stabilization agreement by year end. Such a joint statement by the U.S., Japan, West Germany, Britain, France, Italy and Canada is believed to be conditioned on passage of legislation pending in Congress to reduce the U.S. budget deficit.</br></br>However, many dealers voiced skepticism about the depth of the dollar's support at current levels and predicted a continuation of its downward trend next year, with or without a reaffirmation of the Louvre accord.</br></br>"In the new year, we'll test whatever is in the (Group of Seven) communique to support the dollar," Martin L. McNulty, vice president, foreign exchange, for Lloyds Bank PLC in New York, said.</br></br>A West German government spokesman said yesterday that finance ministers and central bank chiefs from the seven nations were discussing a draft statement on economic and monetary coordination. But he said they hadn't made any decisions about the timing of any such statement.