Dollar Shoots Higher after Official Comments on Falling German Rates
NEW YORK -- The dollar shot higher after Bundesbank President Helmut Schlesinger said that long-term interest rates in Germany could drop more than a percentage point from current levels.</br></br>The U.S. currency also was aided by exceptionally thin market conditions, which provided little resistance to the dollar's rise. And, as the dollar broke above key levels on the technical charts, additional buying kicked in, observers said.</br></br>The Canadian dollar, meanwhile, continued to strengthen, despite a further slip in the country's interest rates. Although the currency's long-term fundamental outlook remains questionable, most traders and analysts said the currency's mainstay is strong year-end demand for Canadian fixed-income instruments.</br></br>Late in New York, the dollar was quoted at 1.5895 marks, up from 1.5690 marks late Monday and at 123.75 yen, up from 123.10 yen. Sterling was trading at $1.5370, well below $1.5580 Monday.</br></br>"Schlesinger really set the tone" for the dollar's rally, said Michael Wissell, director for corporate foreign exchange at Toronto Dominion Bank. "And we really haven't looked back," he added.