Foreign Exchange : Dollar Makes Modest Comeback
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NEW YORK — The dollar made a modest comeback Monday, rising against key European currencies after the West German central bank intervened in the open market. Gold prices pulled back below $400 an ounce in European trading before edging higher in the United States. At the Republic National Bank in New York, the final gold bid was $402 an ounce, compared to Friday’s bid of $401.25.
Louis Calvello, a foreign exchange trader at PBTC International Bank in New York, said market participants were reluctant to buy or sell currencies after West Germany’s central bank intervened.
The Deutsche Bundesbank bought dollars and sold West German marks largely in a bid to buoy currencies in the European Monetary System that have been sinking against the mark recently, according to foreign exchange dealers.
The EMS, an eight-currency mechanism established in 1979 to foster greater economic and monetary coordination among Common Market members, has been affected by the dollar’s declines.
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