Dollar Is Poised for a Leap If Trade Data Are Positive, Analysts and Traders Say
NEW YORK -- The dollar is flirting with what are believed to be the upper limits set for its trading range by the Group of Seven nations, and it could try to go past them if tomorrow's trade report is bullish.</br></br>And if the trade news is less positive, currency analysts and traders say, the past week's rises in U.S. interest rates will probably limit the currency's fall.</br></br>If the June U.S. merchandise trade deficit is substantially narrower than May's seasonally adjusted $10.93 billion, "there's no way they'll be able to hold (the dollar) at 1.90 marks," says Thomas Benfer, a foreign exchange marketing representative for Bank of Montreal's New York branch.</br></br>He says major central banks are apparently comfortable with a dollar range of about 1.80 to 1.90 marks at this time. But he says the U.S. currency could be pushed to 1.95 marks by favorable trade data.</br></br>However, many economists and currency traders seem to have doubts that the trade data will be that positive, and West German Finance Minister Gerhard Stoltenberg said Thursday that a dollar higher than 1.90 marks could have a negative impact on the West German economy.