Italy’s Problems Hit Dollar Hard
The dollar fell Friday on reports European Union officials have concluded Italy won’t qualify for their single currency, raising doubts about monetary union and causing a sharp rally in the mark.
Bundesbank President Hans Tietmeyer’s Thursday comments supporting a strong German currency and his suggestion that monetary union might be delayed a few months also carried over into Friday foreign-exchange dealings and indirectly pressured the dollar, traders said.
The U.S. currency was hurt overnight as well in Japan, where Eisuke Sakakibara, the influential director of the Finance Ministry’s international finance bureau, suggested in a television interview that Japan’s record-low interest rates could soon rise, which would enhance the yen.
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