Dollar Spirals Down Against Mark, Yen
May 05, 2011
A bout of dollar-selling triggered by stop-loss orders at key technical levels sent the U.S. currency spiraling down against most major currencies by the end of global trading Friday. Late in New York, the dollar was quoted at 1.4782 marks, down from 1.4915 marks late Thursday in New York. The U.S. currency was also quoted at 108.07 yen, down from 108.25 yen. Sterling was trading at $1.5568, up from $1.5508. Late in the global day, the dollar touched a key support level of 1.4800 marks, causing stop-loss orders to sell the dollar at that level to kick in. The dollar's fall against the mark also forced the U.S. currency lower against its Japanese counterpart. Currency traders said the dollar's lackluster performance after the Bundesbank's significant interest rate cut Thursday convinced many to break free of their long dollar positions ahead of the weekend. ``After the much larger-than-expected cut, there was the widespread assumption that the mark would weaken,'' said Grant Linnea, senior vice president of foreign exchange at NatWest Markets in New York. ``In reality, all we got was up to about the 1.4950-mark level. When there was no follow-through buying like people hoped for, they gave up and took profits,'' starting the dollar's slide.
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