The dollar advanced strongly on world currency markets Friday, failing to fade in the wake of concerted central bank intervention.
Gold prices were marginally higher. On the New York Commodity Exchange, gold bullion for current delivery rose 10 cents to settle at $363.10 a troy ounce. Republic National Bank quoted a late bid for gold of $362.30, up 50 cents an ounce from Thursday's late bid.Analysts said the dollar moved higher for no clear reason. The German Bundesbank and other European banks again moved to stem the dollar's advance as the European trading session drew to a close, the third time this week that they acted to curb the dollar's rise.
About the same time, analysts said, the Federal Reserve intervened in domestic markets, also to drive the dollar lower.
Unlike the action on Thursday, the intervention was largely unsuccessful. But some analysts speculate it is just a matter of time before the central banks wear the dollar down.
There also is speculation that the dollar will drift lower naturally once investors turn their attention back to the U.S. economy, which is not recovering as quickly as many had predicted. Many thought the end of the Persian Gulf War would help the economy snap back, in part as consumer confidence was restored.
Meanwhile, however, the underlying sentiment toward the U.S. currency remains largely bullish, said Marc Chandler, an analyst with the firm IDEA.