The dollar rose Wednesday in Europe as players became increasingly convinced that the Group of Seven countries, particularly the United States and Japan, are willing to tolerate a higher U.S. currency. Gold responded by sliding nearly $10 an ounce in heavy selling in Europe, reaching its lowest levels since early March. ``The market has a feeling that G-7 doesn't mind the dollar going higher,'' said a trader at a British bank, adding that two central banks, the Deutsche Bundesbank and the Swiss National Bank, engaged in only limited intervention Wednesday. Dealers said they saw no buying by other major central banks. The Group of Seven major industrialized nations is made up of the United States, Japan, West Germany, France, Britain, Italy and Canada. Jim O'Neill, an economist at Swiss Bank Investment Bank in London, said the dollar continued to rise because the U.S. Federal Reserve and the Bank of Japan did not play a major role in Tuesday's heavy concerted intervention. Many traders concluded the Fed and the Japanese central bank have given their consent to a higher dollar. In London, it cost $1.7060 to buy one pound, cheaper than $1.7200 late Tuesday. Other late dollar rates in Europe, compared with late Tuesday's rates, included: 1.8290 West German marks, up from 1.8070; 1.5155 Swiss francs, up from 1.4960; 6.1635 French francs, up from 6.0885; 2.0545 Dutch guilders, up from 2.0210; 1,350.75 Italian lire, up from 1,337.00; and 1.2173 Canadian dollars, up from 1.2105. In earlier Tokyo trading, the dollar broke the 133-yen level for the first time in nearly seven months before falling back to close at 132.40 yen, up 1.45 yen from Tuesday. In London, it topped 133 yen again and was quoted at 133.70 yen. Dealers said the dollar's strength in the face of central bank intervention was the main factor behind gold's slide. They also cited softness in other commodities prices. ``Whenever the market creates a wave like this, you have speculators fueling the fire and then there is investor follow-through on the downside.'' said one bullion dealer in Zurich. The slide began in New York on Tuesday, and then was exacerbated by heavy selling in Europe. Gold fell in London to a late bid price of $433.30 a troy ounce, compared with late Tuesday's $443.20. In Zurich, gold closed at a bid $433.50 compared with $443.20 late Tuesday. Earlier, in Hong Kong, gold fell $6.26 to close at a bid $440.04 a troy ounce. Silver bullion prices fell on the London market. The metal traded at a late bid price of $6.66 a troy ounce, compared with Tuesday's $6.92.
