Dollar Sinks Against Most Currencies In Third-Straight Day of Intervention
NEW YORK -- Hit by a third-straight day of coordinated central-bank intervention, the dollar sank against all major currencies except the pound.</br></br>The main central banks intervened in each other's markets and staggered their dollar sales, continuing a newly practiced approach designed to extract maximum effect from their actions.</br></br>But for the most part, foreign-exchange traders said they don't believe the central banks' unrelenting assault has knocked the market to its knees. They said the dollar can't be pushed much lower unless the interest-rate premium the U.S. enjoys over other major countries is trimmed.</br></br>Also, the sheer size of the dollar's fall this week -- more than seven pfennigs since Friday -- may force central banks to pause to let the market digest the tumble, or their tactics could backfire, traders said.</br></br>Although many dealers said some revision in central banks' tactics must be near, uncertainty over the potential war chest of new approaches ensures trading remains thin and jumpy. "You have to use reverse-reverse psychology to figure this thing out," said a foreign-exchange manager with a major U.S. bank.