Dollar Reverses Slide As Banks Intervene: Currency's Strength Cheers...
The dollar rebounded yesterday from its steep slide of recent weeks, thanks to unusually strong purchases of the American currency by the Federal Reserve and foreign central banks, and the stronger dollar helped send U.S. stock prices sharply upward in the first trading day of the New Year.</br></br>The Dow Jones industrial average scored a 76.42 point gain to close at 2015.25, a 3.94 percent rise on the day. Both in terms of points and percentage, it was the fourth-best advance in stock market history. The other three came last October after the marketÛªs Black Monday plunge on Oct. 19.</br></br>The dollarÛªs recovery from its low points encouraged investors who had seen it fall steadily in the last two weeks of 1987 to new lows not only against the yen, but also against major European currencies.</br></br>The day began with a bleak report that the dollar had fallen to 120.25 yen in Sydney, and after opening at 120.45 yen in Tokyo had set its 12th closing low in 18 days at 121.65 yen.</br></br>But reports that the Federal Reserve Bank of New York had joined with other central banks to stop the decline turned things around.