Dollar Mostly Lower, Despite Growth Figure --- GNP Better Than Expected But Traders Still Await A Cut in Discount Rate
The U.S. dollar continued to drop against most major currencies yesterday, despite a Commerce Department report that showed first-quarter economic growth was better than expected.</br></br>However, an afternoon rally sparked by large buy orders, and what traders said was an oversold condition in the market, brought the dollar up from its lows of the day.</br></br>Underlying the general negative view toward the U.S. currency are trader expectations of a cut in the Federal Reserve Board's discount rate, its lending fee to financial institutions. The report on first-quarter growth in the nation's output of goods and services didn't dissuade traders from believing a discount-rate cut is imminent.</br></br>In late New York trading, the dollar stood at 2.2280 West German marks, down from 2.2493 the day before. The dollar also fell to 1.8573 Swiss francs from 1.8848, and to 7.0975 French francs from 7.1638. The British pound climbed to $1.5245 from $1.5055, and the Canadian dollar inched up to 71.93 U.S. cents from 71.84 U.S. cents.</br></br>The dollar firmed to 176.05 Japanese yen from 176.00, but for most of the day -- until a late afternoon rally -- the dollar traded lower against yen.