Dollar Rallies amid Signs of Narrowing of Gap in World-Wide Interest Rates
NEW YORK -- The dollar rallied on signs that the gap between U.S. interest rates and those in Europe and Japan might soon narrow, combined with hopes that a new Democratic administration will stimulate the U.S. economy.</br></br>Late in New York, the dollar was quoted at 1.5160 marks, up from 1.5000 marks late Monday, and at 122.40 yen, up from 120.45 yen. Sterling, boosted by its own rally against the mark, was trading at $1.6258, up slightly from $1.6225.</br></br>About midday in Tokyo Wednesday, the dollar was trading at 1.5110 marks and at 122.55 yen.</br></br>Frank Pusateri, vice president in corporate foreign exchange at Bank of Boston, said he sees "a shift in sentiment" in favor of the dollar.</br></br>Dealers said an apparent easing in German money-market rates yesterday fueled a belief that Germany's interest rates have finally peaked, which would make room for other European governments to reduce their interest rates to stimulate slumping economies. Disappointing news on the money supply in Japan fanned rate-cut speculation there as well.