Global Slide Of Dollar Deepens;Trading Against Mark Weakest Since War
The dollar yesterday continued its steady, but orderly, slide in global markets, closing at the end of trading in Europe at the lowest level against the German mark since the end of World War II.</br></br>Experts said that the dollar's weakness is the direct result of general economic malaise in the United States and higher interest rates in Japan and Europe that are attracting investment there. The trading also reflects widely held expectations that the Federal Reserve Board will soon lower short-term U.S. rates even further to fight an incipient recession.</br></br>"The best thing that could happen now for the United States," said foreign exchange expert Geoffrey Bell of the New York company bearing his name, "is a falling dollar that would work against recession by improving exports and reducing imports."</br></br>At the close of trading in Europe, the dollar was down to 1.5605 marks, compared with 1.5685 on Tuesday. Trading in New York hit a low of 1.5540 before rebounding slightly to close at 1.5660. Against the yen, the dollar also retreated, closing at 147.65 yen in New York, down from 148.85 the day before.</br></br>Government officials have shown little concern over the dollar's recent weakness, and there were no signs of intervention in the currency market by the United States or any of its economic partners in the so-called Group of Seven industrial nations. On the contrary, a number of experts argue that a declining dollar-which foreshadows the probability of lower interest rates-is the preferred medicine for the declining American economy.