Dollar Is Lifted In Thin Trading By a Few Orders
A few large buy orders in a relatively thin market pushed the dollar sharply higher yesterday. The rise, however, didn't mark a significant change in the overall bearish sentiment toward the U.S. currency, dealers said.</br></br>"The market was squeezed short, and everybody had to run for cover. I feel it's over, though, because the economy doesn't show that kind of improvement to buy dollars," said Peter Wild, vice president of foreign exchange at Bank Julius Baer & Co., New York.</br></br>The dollar's move was aided by lessened concerns about immediate damage to the Reagan presidency from the disclosures of secret U.S. dealings with Iran and Nicaraguan rebels.</br></br>In breaching its highest level in more than a week against leading European currencies yesterday, the dollar overcame another negative report on the U.S. economy, and the bearish effect of a speech by Treasury Secretary James Baker in which he said the administration still seeks exchange-rate adjustments to reduce the U.S. trade deficit. Later in the day, however, U.S. Trade Representative Clayton Yeutter said the administration will let market forces determine the dollar's value, giving traders a green light to buy dollars.</br></br>Traders have expected bouts of exchange-rate volatility this month as the market temporarily becomes less liquid. "Some of the banks are winding down for the year-end, and we find the markets a little thinner than usual," said Robert Cassidy, vice president of foreign exchange at Chemical Bank, New York.