Foreign Exchange for Monday, Aug. 12, 1985 : Dollar Broadly Lower; Gold Mixed
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NEW YORK — Expectations of lower U.S. interest rates sent the U.S. currency downward against all other major currencies Monday. Gold prices were mixed.
The British pound posted another day of strong gains, picking up more than 2 cents in Europe and more than 3 cents in New York trading.
“Sterling seems to be the catalyst,” said Mark Biagini, vice president in charge of futures at the Bank of America’s New York trading center. “People are speculating in it. It seems to be driving the dollar.”
Biagini said Friday’s remarks by Salomon Bros.’ Henry Kaufman--who said he expected interest rates to fall--also “had a like factor” behind Monday’s trading activity. European traders also attributed the dollar’s fall to Kaufman’s comments.
“Kaufman spoke out what many market participants quietly have been thinking for some time,” said one Frankfurt currency trader, “namely, that the U.S. economy isn’t likely to do as well as the . . . Administration says it will in the second half (of 1985).”
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