Dollar Plunges; Stocks, Bonds Follow --- Central Banks Join Forces To Drive Currency Down
The dollar plunged on a round of concerted dollar selling by central banks. The central-bank intervention backed up a weekend warning by major industrial nations that continued dollar strength could hurt the world economy.</br></br>The dollar tumbled to 1.8993 marks and 142.13 yen in late New York activity, down sharply from 1.9510 marks and 146 yen late Friday. The pound climbed to $1.6170 from $1.5715 Friday.</br></br>In Tokyo Tuesday, the dollar opened for trading at 142.25 yen, down from Monday's Tokyo close of 142.95 yen.</br></br>The Group-of-Seven major industrial countries -- the U.S., Japan, West Germany, France, Britain, Italy and Canada -- issued a communique in Washington on Saturday stating that the dollar's rise in recent months is "inconsistent with longer run economic fundamentals."</br></br>The central banks launched their attack on the U.S. currency early yesterday with dollar sales by the Bank of Japan, the Federal Reserve Bank of New York and the Bank of Canada in Far Eastern trading. Dealers said the Bundesbank, West Germany's central bank, intervened in the Tokyo and Singapore markets through West German commercial banks.