WORLD MONEY FRONT DOLLAR RISES SHARPLY ON US TRADE REPORT

WORLD MONEY FRONT DOLLAR RISES SHARPLY ON US TRADE REPORT

The U.S. dollar climbed to a two-week high against both the deutsche mark and the yen Thursday on heavy technical demand spurred by better-than-expec ted U.S. trade data.

Analysts said huge demand for dollars lifted the unit to its highest point against both the deutsche mark and the yen since March 4, at 1.69 marks and 128.70 yen.There was a knee-jerk pop-up when January's trade gap came in at $12.43 billion, slightly above December's $12.28 billion, but lower than some expectations.

Meanwhile, the Canadian dollar traded above 80 U.S. cents Thursday for the first time in four years, buoyed by Wednesday's report of an increase in Canada's foreign trade surplus.

The Canadian unit is now more than 10 cents above its record low of 69.13 U.S. cents recorded in February 1986.

In London Thursday, sterling closed steady after regaining ground lost during the morning on U.K. interest rate cuts, while the U.S. dollar ended firm, buoyed by the U.S. trade figures, dealers said.

They said many traders were bearish before the trade data and prepared for a sell-off, so had to quickly change their stance and buy when the data were announced.

Dealers said they expected the dollar to test 1.70 deutsche marks in the next few days, but did not expect it to break above that level.

In Tokyo Thursday, sterling topped 3.10 deutsche marks, as the dollar traded in a narrowrange before the release of the U.S. trade report. The

dollar closed at 127.43 yen, down 0.06 from Wednesday.

Sterling was bought against the deutsche mark because of Britain's high interest rates and strong economy, dealers said.

Reports the United States plans to send troops to Honduras because of an alleged incursion by 2,000 Nicaraguan troops caused only a brief hiccup of

dollar-buying. A further escalation of tension in Central America could be a bullish factor for the U.S. unit, but the effects would be limited, dealers said.