The dollar firmed against European currencies this morning but dropped against the Japanese yen. Spot gold prices regained some of the ground lost in Tuesday's trading in New York. In Tokyo, the dollar sank to its lowest level since February 23. It closed at 146.65 yen, down 0.85 yen from Tuesday. Later in London, the dollar was quoted at 146.12 yen. Other dollar rates in Europe, compared with late Tuesday: _1.5889 German marks, up from 1.5875 _1.3514 Swiss francs, up from 1.3475 _5.3315 French francs, up from 5.3210 _1.7905 Dutch guilders, up from 1.7880 _1,163.25 Italian lire, up from 1,162.00 _1.1511 Canadian dollars, down from 1.1523 In London, one British pound cost $1.8572, down from late Tuesday's $1.8595. Dealers in Tokyo said institutional investors, noting the narrowing gap between U.S. and Japanese interest rates, began dumping dollars as soon as the Tokyo market opened and the U.S. unit fell below 146 yen. Once that happened, ``there was a greater than expected demand for the dollar below the 146-yen line,'' said Yutaka Hayashi, a dealer with the Mitsui Taiyo Kobe Bank. Several analysts believe the dollar will sink as low as 140 yen this summer, and perhaps dip below 1.5620 Deutsche marks, the lowest level since World War II. ``There is not a lot of reason why the market should start buying the dollar,'' said Jim O'Neil, international economist at Swiss Bank Corp in London. The dollar's weakness in the foreign exchanges is helping support gold prices, although dealers are debating whether gold has sufficient support to move convincingly into a technical chart resistance area between $373.00 and $375.00 an ounce. Gold rebounded this morning from an earlier retreat in New York, where it was quoted at $370.20 bid late Tuesday. In London, gold was quoted at $371.10 per ounce at the morning fixing, compared to $372.05 a troy ounce late Tuesday. The Zurich market was closed for a national holiday. In Hong Kong, gold rose $2.04 per ounce to close at $371.46 per ounce. Silver bullion traded late in London at a bid price of $4.83 a troy ounce, down from $4.85.
