Dollar Surges Higher; Gold Tumbles
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NEW YORK — The dollar surged again Friday against most major currencies, extending robust gains of the previous session amid speculation of a strengthening U.S. economy and heavy demand for dollars in Japan.
Gold prices tumbled for the second session. In after-hours trading, Republic National Bank in New York quoted a late bid for gold at $407.25 an ounce, down $8.25 from Thursday’s late bid.
Currency dealers in London and New York said the U.S. Commerce Department’s report on Thursday that U.S. orders for durable goods jumped 4.9% last month fueled speculation that the economy is strengthening.
If the economy is getting stronger, the Federal Reserve Board would have less incentive to encourage lower interest rates. Falling interest rates have made the dollar less appealing to foreign investors.
Also driving the dollar higher, foreign exchange analysts said, is heavy demand for dollars in Japan where investors are preparing for next month’s auctions of new Treasury issues. The Japanese are major buyers of U.S. Treasury notes and bonds.
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