Eurodollar Bonds Rise 1/8 to 1/4 Point On the Firmer Dollar --- Special to The Wall Street Journal
LONDON -- The firmer dollar helped boost Eurodollar bond prices 1/8 to 1/4 point, but the improvement wasn't enough to encourage much retail buying.</br></br>"It's definitely the stronger dollar," one dealer at a Swiss bank said, noting that the U.S. currency rose on the smaller-than-expected U.S. August trade deficit of $13.32 billion. The deficit, which was below the $18.04 billion initially reported for August and the revised $16.05 billion July trade gap, could herald stronger than expected U.S. third-quarter growth. But that had little impact on the currency-conscious Eurobond market, bond specialists said.</br></br>The dollar "is where the primary focus is at the moment," one new-issue manager said.</br></br>With the West German central bank also providing early support for the U.S. currency, the dollar firmed in late trading against the mark.</br></br>U.S. Commerce Secretary Malcolm Baldrige said the shrinking of the August trade gap "may be the turning point in our trade deficit" and cited the drop in imports of manufactured goods, "where the decline in the dollar may be taking hold."