Foreign Exchange for Monday, Sept. 8, 1986 : Dollar Advances in Moderate Trading
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NEW YORK — Pushed up by higher interest rates, optimism about the economy and technical factors, the dollar rose against all major currencies except the Canadian dollar in moderately active trading on Monday.
Gold prices, which soared last week, relinquished some gains. Bullion was quoted at $410.25 an ounce at Republic National Bank in New York, down $11.75 from Friday’s bid.
“It’s been a very strong advance (for the dollar) in the U.S.,” said Garrett Glass, vice president for First National Bank of Chicago. “People are getting more positive about it (the dollar) as they see interest rates head up,” Glass said. “There’s a conviction in the market that as interest rates head higher in the U.S., the dollar will move higher.”
Higher interest rates make dollar-denominated investments more attractive.
Glass said there was a fair amount of short-covering, or the buying of dollars to cover agreements to sell dollars, on Monday.
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