Friday, 30 October 1998
N E W Y O R K (AP)
THE DOLLAR rose against the German mark and some other major
currencies Friday as news of unexpected growth in the U.S. economy sent
stocks rallying.
But the dollar fell against the Japanese yen in part because the Group of
Seven industrial nations supported reform efforts in Brazil. This was
interpreted as good news for emerging markets, including those suffering
near Japan, thus giving the yen a lift.
In late New York dealings, the dollar was quoted at 1.6549 marks, up
from 1.6537 late Thursday. The dollar also was changing hands at 116.14
yen, down from 116.93.
Market participants largely had interpreted the U.S. economy as being in
decline, especially with the Federal Reserve lowering interest rates earlier
this month to spark borrowing and spending.
So investors were surprised by a Commerce Department report showing
gross domestic product growing this summer at a healthy 3.3 percent
annual rate. The unexpected third-quarter growth was attributed to
consumer spending that offset the continuing decline in exports to overseas
markets.
President Clinton welcomed the news, saying: "In the face of worldwide
economic turmoil our economy remains the strongest in a generation."
Stocks rallied on the announcement. The Dow Jones industrial average
climbed 165 points before ending the day up about 100 points.
Meanwhile, G-7 finance ministers endorsed a proposal by President
Clinton to allow the International Monetary Fund to speed emergency
loans to countries facing investor panic.
Brazil would greatly benefit from the proposal, since the IMF is already
putting together a $30 billion rescue package for Latin America's largest
economy. Brazil and Mexico's stock indices rose on the news.
"It helps settle down things in the Far East," where emerging markets have
been suffering for more than a year, and helped the yen strength against the
dollar, said Bill Bertha, a senior trader at Mellon Bank in Pittsburgh.
Other late dollar rates in New York, compared with late Thursday: 1.3510
Swiss francs, up from 1.3459; 5.5487 French francs, up from 5.5462;
1,636.50 Italian lire, up from 1,636.00; and 1.5434 Canadian dollars,
down from 1.5484.
The British pound was quoted at $1.6739, down from $1.6756 |
