Foreign Exchange : Foreign Exchanges Focus on Mark
NEW YORK — Foreign exchange markets focused on the West German mark on Tuesday as traders waited to see what action the Bonn government would take as its currency soared and the French franc dropped.
The dollar fell on almost all markets, and gold prices were mixed. Republic National Bank in New York quoted a bid of $399.25 for an ounce of gold as of 4 p.m., down from $402 late Monday.
Traders bought up marks in expectation of a revaluation within the European Monetary System. Speculation about a possible realignment of the relative values of the EMS currencies was fueled by news that the French central bank would no longer intervene in the market to support the franc, which has fallen to its lowest permitted values against the mark in the European Monetary System.
French Premier Jacques Chirac said Tuesday the franc would not be devalued, and stated in a radio interview it was “up to the German authorities to draw the conclusions” from the situation.
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