The dollar edged aimlessly higher Friday as traders absorbed mixed messages about the economy and interest rates ahead of this weekend's meeting between the world's major banking chiefs.
Gold prices were mixed.Currency trading was extremely quiet in the absence of major factors. The government reported the nation's second consecutive decline in gross national product, and while the dismal news was worse than some analysts expected, the currency market took the bad news in stride.
The Commerce Department said the economy shrank at an annual rate of 2.8 percent in the first quarter. The gross national product, the country's total output of goods and services, fell at an even faster pace than the 1.6 percent rate of decline recorded from October through December.
Traders also were relatively unmoved by an apparent sign of higher inflation in the report's inflation gauges.
One gauge, the GNP price index that measures a fixed basket of goods, increased at an annual rate of 5.1 percent in the first quarter - up from a 4.7 percent rise in the fourth quarter.
"The GNP report was a classic mixed bag. For the dollar market, it very quickly was just thrown out the window," said Jerry Egan, chief dealer at the Bank of Boston.
Market participants largely focused on this weekend's meeting in Washington between monetary chiefs of the seven major world economies. President Bush was scheduled to meet with the finance ministers and central bankers on Sunday.
Dollar traders were concerned by remarks Friday by German Bundesbank President Karl Otto Poehl indicating he wanted to keep German monetary policy tight.
Stronger interest rates in overseas markets generally help currencies competing against the dollar.
In Tokyo, the dollar fell to a closing 137.83 Japanese yen from 137.87 yen on Thursday. Later in London, it rose to 138.15 yen. In New York, the dollar settled at 138.10 yen, up from late Thursday's 137.80 yen.
Gold fell slightly in New York but was mixed overseas. On the Commodity Exchange, gold bullion for current delivery settled at $353.90 a troy ounce, down 10 cents from late Thursday. Republic National Bank later quoted a bid of $353.50 a troy ounce, also off 10 cents from late Thursday.