CURRENCY : Dollar Mostly Higher as Pound Dominates Market

NEW YORK — The U.S. dollar was mostly higher against major currencies on a technical rebound Wednesday as world markets remained transfixed by the surging British pound, analysts said.

Gold prices were also higher. Republic National Bank of New York quoted a bid price of $436.15 for an ounce of gold as of 4 p.m. EST, up from $435.70 late Tuesday.

John McCarthy, a currency trader at Irving Trust, said the dollar moved lower all day but bounced back at the end of the session as traders covered short positions.

In a short sale, traders sell borrowed dollars in expectation of “covering” the transaction by replacing the dollars with others bought at cheaper rates.

Since last Friday, the dollar has lost 7.5 cents against the British pound, as sterling surged amid higher British interest rates and a strengthening economy.

Adding strength to the pound Tuesday was a remark by Prime Minister Margaret Thatcher ruling out an early cut in interest rates.

Dan Holland, an analyst at Discount Corp., said sterling’s rise “threw a bit of confusion into the market” because it led traders to wonder if Britain were going to stop helping the other major industrial nations maintain currency stability.

But he said those fears eased Wednesday after a remark by U.S. Treasury Secretary James A. Baker III that the Reagan Administration believed that London remained “fully committed” to upholding the Dec. 22 agreement among the industrialized nations.

In London, the pound closed at $1.8460, up from $1.8415. In New York, it closed at $1.8476, up from $1.8426.

In Tokyo, the dollar closed at 128.08 Japanese yen, up from 127.80. Later, in London, it was quoted at a lower rate of 128.00 yen. Later in New York, the dollar stood at 127.95 yen, up from 127.93 on Tuesday.

Other late dollar rates in New York, compared to late Tuesday, were: 1.6690 West German marks, up from 1.6674; 1.3791 Swiss francs, up from 1.3770; 5.6530 French francs, up from 5.6482; 1,232.50 Italian lire, up from 1,231.00, and 1.2537 Canadian dollars, down from 1.2538.

Other late dollar rates in Europe, compared to late Tuesday, were: 1.6685 West German marks, up from 1.6668; 1.3785 Swiss francs, down from 1.3790; 5.6485 French francs, down from 5.6625; 1.8750 Dutch guilders, down from 1.8780; 1.231.50 Italian lire, down from 1,234.00, and 1.2532 Canadian dollars, up from 1.2524.

On the New York Commodity Exchange, gold closed at $436.20 an ounce, up 90 cents from late Tuesday’s $435.30.

Earlier in London, it fell to a late bid price of $436.50 from $438.10. In Zurich, Switzerland, the late bid price was $437, up from $436.50. In Hong Kong, gold closed at a bid $438.01, up from $438.

Silver bullion traded late in London at a bid of $6.31 an ounce, down from $6.36. On the New York Comex, silver stood at $6.298, down from $6.36.

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