clarinews@clarinet.com (BRENDAN MURPHY, UPI Business Writer) (02/03/90)
NEW YORK (UPI) -- The dollar was mostly higher in New York trading Friday as traders responded to U.S. unemployment data with limited enthusiasm but pared German mark and Japanese yen holdings ahead of the weekend's schedule of political events that might move markets. The Labor Department said non-farm payroll employment increased by 275,000 last month to keep the civilian unemployment rate unchanged since June at 5.3 percent. The report eased concerns about a possible recession, even if losses continued in manufacturing sector employment. Nonfarm job growth was much larger than the 150,000 to 200,000 expected by many economists, but traders basically shrugged it off, said Lisa Finstrom, a currency analyst with Shearson Lehman Hutton. ``It was actually quite mixed,'' she said, because special factors such as cold weather in December, which delayed hiring into January, pumped up the jobs figure. Despite strong overall gains, there was a sharp 112,000 drop in manufacturing jobs and wages showed less expansion than might have been feared. This could lessen Federal Reserve Board concern about inflation and lead it to lower short-term interest rates to counter economic softening -- bearish for the dollar. In light of all this, Finstrom said, the report was ``a mixed bag.'' What tipped the balance for the dollar was political uncertainty in Japan and the Soviet Union, where a major Communist Party meeting opens Monday. In late New York trading the dollar changed hands at 1.6825 German marks, up from 1.6760 the previous day. Against the Japanese unit the dollar was quoted at 145.50 yen, also up against 144.85. The dollar shot up early this week on a report that Soviet President Mikhail Gorbachev was considering resigning his post as secretary general of the Communist Party. Gorbachev later denied it, but traders were not eager to expose themselves before the Moscow meeting. ``I think nobody really wants to be short marks (holding selling contracts for the currency) going into that,'' Finstrom said. ``It's not a question of being short marks, but (of being) flat.'' The other political risk seen in the market was a series of debates to be held in Japan over the weekend to prepare for parliamentary elections later this month. The yen has been rising and falling with the electoral fortunes of the scandal-ridden ruling Liberal Democratic Party. In New York the British pound fell to $1.6835 from $1.6840. Other dollar rates: 1.4895 Swiss francs, off from 1.4915; 5.7135 French francs, up from 5.6905; and 1,250.25 Italian lire, up from 1,245.50. In Europe the dollar closed mostly higher, finishing in Frankfurt at 1.6870 German marks against 1.6810 and in Zurich moving up to 1.4995 Swiss francs against 1.4975. In Paris it was up to 5.7130 French francs against 5.7120, and in Brussels advanced to 35.24 Belgian francs against 35.10. The dollar closed lower in Milan at 1,249.80 Italian lire against 1,249.85. In London, the pound closed lower at $1.6815 against $1.6845. Republic National Bank in New York closed cash gold unchanged at $418.25 an ounce. The New York Commodity Exchange settled gold at $418.20 an ounce, up from $418. In Zurich gold rose to $418 an ounce from $416, while in London it moved up to $417.25 from $416.25 -- gaining in both markets on news that South Africa was lifting a 30-year ban on the African National Congress. Republic closed cash silver at $5.325 an ounce, up from $5.305. Comex spot silver rose to $5.307 an ounce from $5.297. Zurich silver was up to $5.30 an ounce from $5.25. London silver rose to $5.29 an ounce from $5.28.