Newspaper article THE JOURNAL RECORD

Dollar Rises in Japan, Down in Europe, U.S

Newspaper article THE JOURNAL RECORD

Dollar Rises in Japan, Down in Europe, U.S

Article excerpt

NEW YORK (AP) - The dollar rose in Japan, then staged a broad retreat in European and U.S. foreign exchange markets later Wednesday as traders sold dollars to cash in on the currency's recent rise.

Currency dealers said loan problems in the $74 billion U.S. farm credit system, which sent interest rates tumbling in American bond markets, contributed to the dollar's decline. But the dealers also said the dollar finished Wednesday's session above the day's lows against several key currencies.

Gold prices, which earlier fell sharply in response to the dollar's strength and the end of a strike by South African miners, appeared to stabilize in late U.S. trading. Republic National Bank of New York said gold bullion was bid at $324.75 a troy ounce as of 4 p.m. EDT, down 50 cents from the late bid Tuesday.

Typical of the dollar's day was its performance against the Japanese yen.

As trading began in Tokyo, the dollar rose to 239.90 yen from 238.85 yen Tuesday. Later in London, however, the dollar slipped to 239.32 yen. By the end of the trading day in the United States, thedollar had recovered to 239.65 yen against 239.80 yen late Tuesday.

Albert Soria, a vice president at the New York branch of Swiss Bank Corp. said the dollar suffered ""a bout of profit-taking after the rise we've seen in the past week or so.''

Before Wednesday's decline, the dollar had climbed almost 2.8 percent since the previous Wednesday.

Soria said traders were awaiting new government reports on the economy in the United States for clues on the dollar's next move.

A trader at another New York bank said reports of severe loan problems at the farm credit system scared some European investors into selling dollars because of fears of a new financial crisis.

But the trader, whose bank allows him to comment only if he and the institution remain anonymous, said that when it became clear that the problem did not present an immediate crisis, the dollar rebounded a bit. …

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