Dollar Rallies On Rate Cuts, Then Slips Back --- Sell-Off, After Reductions In Fees by Europeans, Reinforces Bearish View
Interest-rate cuts in Europe sparked a brief dollar rally yesterday, but a subsequent wave of sell orders left the U.S. currency down slightly for the day.</br></br>The dollar's inability to hold onto its gains reinforced the market's bearish sentiment on the U.S. currency, traders said. "Everybody took advantage of the stronger dollar to sell," Keiichi Udagawa, chief trader at Bank of Tokyo Ltd.'s New York agency, said.</br></br>Traders attributed the dollar sell-off to disappointment with the deficit-reduction plan reached by White House and congressional negotiators Friday and the continuing large U.S. trade deficits.</br></br>"The disappointment in the budget package and its lukewarm reception is hanging over the dollar and preventing it from moving up dramatically," Ronald H. Holzer, vice president and chief dealer at Harris Trust & Savings Bank, Chicago, said.</br></br>The negotiators' plan to cut the budget deficit in the current fiscal year by $30 billion still requires final approval by Congress.