Dollar Resumes Climb as Traders Defy G-7 and Rubin Says It's Back to Normal
Just two trading days after the world's seven major industrial countries signaled they wanted to slow the surging dollar and see less-volatile currency markets, traders rebelled.</br></br>Before retreating on profit-taking, the greenback climbed to 1.6810 marks -- its highest level since May 1994 -- on an unconfirmed report that German policy makers would welcome a stronger dollar.</br></br>In congressional testimony, Treasury Secretary Robert Rubin said the dollar had "come back into a normal range" and "corrected itself" after earlier misalignments. He also said he believed a strong dollar had contributed to low U.S. inflation and stable growth. Traders said the dollar dipped following his remarks and then rallied when they realized it wasn't headed any lower.</br></br>Mr. Rubin cautioned yesterday that he wouldn't comment publicly about what he called the behavior of financial markets, but reiterated that the dollar shouldn't be used as a tool in U.S. trade policy.</br></br>Asked about Japan's economic woes, the Treasury secretary said that the U.S. has concerns about the nation's low growth rates for the past four or five years. But he added that "we aren't concerned about a systemic financial crisis" in Japan.