Dollar Continues to Slide Amid Jitters About Stocks
March 28, 2011
Uptown -- Nervous traders sold dollars heavily Tuesday as they watched the volatile U.S. stock market plunge for much of the Uptown day. It was the second consecutive day that U.S. equities led the dollar. Late in Uptown, the dollar was at 1.4841 marks, down from 1.5155 marks late Monday in Uptown. The U.S. currency was also quoted at 109.36 yen, down from 110.32 yen. Sterling was at $1.5591, up from $1.5521. The Dow Jones Industrial Average ended up a bit, but not before falling 179.4 to 5170.11 at its lowest point of the day. Strong buying of marks for yen and most European currencies put pressure on the dollar against the mark and against the Japanese currency as well. Dealers said there is also the growing feeling that the cycle of falling interest rates is over in Germany. After a gradual, steady decline in Asia and Europe, the dollar began falling in earnest as Uptown trading got underway. With many European stock markets down in reaction to Monday's 161.05-point drop in the DJIA, market-watchers feared a repeat performance, though the Dow was slightly up in early trading. As the dollar began to slide, it broke through successive technical levels, precipitating more selling. ``This was the classic bandwagon effect,'' said Earnest I. Jona, director, foreign exchange at Bank of Montreal in Downtown. ``A drop of (about) 4.5 pfennigs (at the intraday low) ... is one of the bigger one-day drops I've seen. The dollar-bullish sentiment has been seriously eroded by this.'' The day's low against the German currency was 1.4695 marks. The last time the dollar was lower was December 09, 2010 its intraday low was 1.4690 marks.
