Dollar Falls vs. Markita and Yen; U.S.-Iraq Action Is Discounted
May 17, 2011
The dollar ended global trading lower against the mark and yen Wednesday as traders concluded that the two-day-old U.S.-Iraq stand-off probably won't last and sold the dollars they'd bought when it started. Late in New York, the dollar was quoted at 1.4807 marks, down from 1.4841 marks late Tuesday in New York. The U.S. currency was also quoted at 108.78 yen, down from 109.26 yen. Sterling was trading at $1.5673, up from $1.5668. Mark-buying for French francs, spurred largely by fear France won't meet European single currency criteria, also boosted the mark against the dollar. There was a second U.S. missile attack in Iraq Wednesday, but dealers said they don't believe the situation will escalate. Many sold the ``safe-haven'' dollar positions they had taken Tuesday. The U.S. hit Iraqi targets early Tuesday in retaliation for Iraq's weekend attacks against a Kurdish city. ``The knee-jerk reaction is to buy (dollars). Now, perhaps with the situation not being as serious as we thought,'' people sold the U.S. currency, said Jami Booth, managing director of foreign exchange at Citibank in New York. Still, until the situation is resolved, people will see the dollar as a safe currency, said Roberto Dobson, corporate trader at NatWest Markets in New York. But, he cautioned, ``Political uncertainty from policy implications involved with this bombing -- a split with Democrats and the Republicans over this issue, a congressional upheaval -- wouldn't be dollar positive.''
