U.S. Dollar Plunges on Expectations Of Dropping Rates and Reports on Yen
The dollar plunged yesterday on trader expectation of falling interest rates and reports that several major industrial nations want the Japanese yen to strengthen.</br></br>In late New York trading, the dollar dropped to 2.2970 West German marks from 2.3400 marks the day before, to 177.60 yen from 180.08 and to 1.9165 Swiss francs from 1.9550. The British pound climbed to $1.4790 from $1.4653.</br></br>However, some traders contended that the dollar's decline was exaggerated by the market's lack of volume.</br></br>In early trading in Tokyo Friday, the dollar rose against the Japanese currency to 178.30 yen from 177.60 in New York yesterday afternoon.</br></br>At about noon in Washington, Nigel Lawson, Britain's chancellor of the exchequer, prompted heavy dollar selling and yen buying when he told reporters that finance ministers of the major industrial countries -- except Japan -- prefer to see the yen appreciate. Mr. Lawson indicated that U.S. Treasury Secretary James Baker shares this view.