October 10, 1997 in Nation/World

German Rate Hike Hurts Dollar

 

The dollar tumbled to a 3-1/2-month intraday low against the mark Thursday after Germany’s central bank raised a key short-term interest rate for the first time in five years.

Although many traders had anticipated a rate hike by the Bundesbank, the dollar dropped quickly after the bank raised its securities repurchase rate to 3.3 percent from 3 percent, citing a need to fend off inflation.

“The timing and the magnitude … surprised the markets,” said John Nelson, foreign exchange trading manager at ABN-AMRO Bank NV in Chicago.

Exchange Currency in Dollars Dollar in foreign currency

Canada .7277 1.3742

France .1707 5.8591

Germany .5734 1.7439

Great Britain 1.6244 .6156

Italy .000582 1717.00

Japan .008258 121.10

Mexico .128999 7.7520


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