U.S. Dollar Falls Against Most Currencies; Decline Is Softened as Bond Rally Stalls
The U.S. dollar declined against most major foreign currencies yesterday, although the drop was softened when bond prices failed to advance Tuesday's rally.</br></br>The dollar began weakening in Europe as interest rates fell there for dollar deposits. The decline continued in New York trading, which was thin, although the dollar recovered slightly when bond prices began falling. Lower bond prices translate into higher long-term interest yields, which make dollar denominated investments more attractive. The bond market later closed little-changed from Tuesday.</br></br>"This is the first time in a while that we've gone back to trading off interest rates, and my feeling is it will continue between now and the (U.S.) election," said Daniel Holland, an assistant vice president at Discount Corp., New York.</br></br>In late New York trading, the dollar fell to 3.0210 West German marks from 3.0318 marks on Tuesday. The British pound rose to $1.2223 from $1.2155.</br></br>In early Tokyo trading Thursday, the dollar strengthened against the Japanese currency, to 245.45 yen from 245.13 yen late yesterday in New York.