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