Newspaper article THE JOURNAL RECORD

Dollar Rebound Indicates European Intervention

Newspaper article THE JOURNAL RECORD

Dollar Rebound Indicates European Intervention

Article excerpt

NEW YORK (AP) - The dollar rebounded Monday from five-year lows reached last week against some foreign currencies, reacting to speculation that European nations would act to keep the dollar from weakening further.

Gold prices rose, hitting a 3 1/2-year high in Europe. Republic National Bank in New York at 4 p.m. EDT quoted gold bullion at $440.00 a troy ounce, up $6.50 from late Friday.

Fueling the dollar's rise were reports that finance ministers of the 12-member European Community had agreed to intervene in the currency markets to keep the dollar from falling further.

Speculation about possible coordinated dollar support arose following a Saturday meeting of the Common Market finance ministers, when the officials agreed to privately urge the United States to halt any efforts to drive the dollar lower.

The steep fall of the dollar, which makes imports more expensive in the United States, has raised fears among Common Market members that a drop in their exports will mean jobs losses in Europe. Similar concerns have been voiced in Japan, where the dollar's drop has been steepest, for months.

Against the West German mark, the dollar rose to 2.0300 marks in London from 1.9855 marks late Friday. Later in New York, the dollar was quoted at 2.0294 marks late Monday, compared with 1.9860 on Friday.

""There is some confusion,'' said Dan Holland, assistant vice president of Discount Corp. in New York. ""Our feeling here is the fundamentals still are in place for a lower dollar and it doesn't look very likely the administration will change its views so dramatically in such a short period of time.''

Last week, Treasury Secretary James A. Baker III sparked a selloff that pushed the dollar to a five-year low against the mark when he said the Reagan administration was ready to pressure the dollarlower if necessary to help ease the U.S. trade deficit.

In Tokyo, where trading ends as Europe's business day begins, the dollar rose in brisk trading to close at 154. …

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