Dollar drifts up, but gold slips

LONDON (UPI): The U.S. dollar drifted slightly higher yesterday in anemic range-bound trading against major foreign currencies in a technical rebound following Thursday's decline.

Analysts said the dollar inched higher on some position adjusting ahead of the weekend, but trading was confined to narrow range amid some jitters over the direction of stock prices on Wall Street.

Currency watchers said the near term outlook for dollar is increasingly uncertain following the heavy slide in U.S. stocks and bonds in recent days.

Experts added that although conventional wisdom suggests that the increased risk of higher U.S. interest rates -- following the recent release of several stronger-than-expected U.S. economic reports -- should be dollar positive, the threat of further declines in U.S. stocks and bonds means the dollar's ultimate response will remain ambiguous.

In European trading, the dollar began the day stronger in Frankfurt at 1.5450 marks, up-down from 1.5394 late Thursday.

The dollar began the day higher-lower in Zurich at 1.3460 Swiss francs, up from 1.3396. In Paris, the dollar opened higher at 5.2123 French francs, up from 5.1917.

The dollar opened stronger in Brussels at 31.82 Belgian francs, up from 31.73 and began the day higher in Rome at 1,520.10 Italian lira, up from 1,515.40 lira.

In London, the pound began the day fractionally higher at $1.6958 compared with $1.6952 late Thursday.

In Asia, banks, markets and most major businesses remained closed in Japan Friday for an extended New Year's holiday. Trading will resume in Tokyo on Monday, Jan 6 with the dollar hovering at 115.98 Japanese yen.

Elsewhere in Asia, the dollar rose in Singapore to 1.4015 Singapore dollars from 1.3988 on Tuesday. Markets in Singapore were closed on Wednesday and Thursday for the New Year's holiday and election day.

Meanwhile, the dollar settled unchanged in Hong Kong at 7.7345 Hong Kong dollars.

On the metals markets, In Europe, gold opened $2.20 an ounce lower in Zurich at $367.25 and opened unchanged in London at $366.75.

The London morning gold fixing was $364.30, off $2.45 from Thursday's close.

Silver opened 11 cents lower in Zurich at $4.71 an ounce and opened 4 cents lower in London at $4.70 an ounce.

In earlier trading in Asia, gold closed at $365.65 on the Hong Kong Bullion Exchange, off $2.30 from Thursday's close.