Market Reacts To U.S. Move To Help Dollar
The United States mounted a massive surprise rescue effort for the dollar Wednesday, reviving the depressed currency and sparking the biggest stock market rally in more than three years. The United States and other major industrial countries increased the value of the dollar by buying almost $2 billion in U.S. currency on world markets. This is a common practice in currency markets, but Wednesday’s organized buying effort was not expected.
American investors benefited immediately. The Dow Jones industrial average gained 86.46 points, the biggest one-day gain since Dec. 23, 1991.
Many of the largest mutual funds recorded good days. Fidelity Magellan jumped 90 cents to $79.99; Janus Fund rose 17 cents to $21.13; and Vanguard/Windsor Fund gained 17 cents to $14.19.
An increase in the value of the dollar also makes it cheaper for Americans to travel abroad.
Even with the rally Wednesday, the dollar is still down 15 percent against the Japanese yen since the beginning of this year and down 9 percent against the German mark.