Dollar Rises Against Mark, Mixed Elsewhere
NEW YORK (AP) _ The dollar strengthened slightly against the German mark Wednesday as investors paused in their flight to the mark from other European currencies.
The Canadian dollar, which hit the lowest level in nine years on Tuesday, weakened further against the dollar. The Bank of Canada did not intervene on behalf of the nation’s currency.
The Canadian dollar was quoted at 1.1408 late in New York, down from 1.4103 Tuesday.
Worries about the budget deficit and the Quebec separatist movement have weakened the Canadian dollar. Mexico’s recent peso problems have reverberated into Canadian dollar dealings because investors are worried about buying currencies of countries with unstable economic outlooks.
The dollar traded in narrow ranges in quiet dealings, as traders reassessed European currency markets and the Mexican financial markets, which steadied amid U.S. pledges of peso support..
The mark had strengthened Tuesday as investors dumped other European currencies, particularly the Italian lire and Spanish peseta, a reflection of worries about economic and political problems in Italy and Spain.
Traders said market participants took a breather from mark buying Wednesday but they expected it to resume.
``The uncertainties are still there,″ said Earl I. Johnson, vice president and corporate adviser at Harris Trust & Savings Bank.
In late New York trading, the dollar was quoted at 1.5365 marks, up from 1.5328 late Tuesday. In London, the dollar was trading at 1.5350 German marks, down from 1.5395.
The dollar was also changing hands in New York at 100 yen, down from 100.08 Tuesday. In London, the dollar fetched 99.90 Japanese yen, down from 100.35 late Tuesday.
With most of the focus on events abroad, the dollar had little reaction to a 1994 consumer price report that showed benign inflation and a small-than-expected increase in December consumer prices.
The report reaffirmed most traders’ expectations that the Federal Reserve Board will raise interest rates a half percentage point in a few weeks to thwart higher inflation.
``Focus on interest rates are temporarily sidelined,″ said John McCarthy, foreign exchange manager at ING Capital Markets Inc.
Other late dollar rates in New York, compared with late Tuesday: 1.2885 Swiss francs, up from 1.2815; 5.3065 French francs, up from 5.2930; 1,618 Italian lire, down from 1,628.
The British pound was quoted at $1.5595, down from $1.5617. In London, the pound was unchanged at $1.5585.