Dollar Falls Despite Intervention

A coordinated intervention by the Federal Reserve and other key central banks surprised currency traders and sent the dollar surging Wednesday, but it plummeted immediately when the dollar-buying spree was over.

Traders attributed the decline to basic underlying reasons that have pressured the dollar down: the large U.S. trade deficit and diminishing expectations that the Fed would raise interest rates. Higher U.S. rates would make dollar-denominated holdings more attractive.

“Intervention just doesn’t work,” said Tom Hutchinson, director of capital market research at MMS International in New York.

Canada .7183 1.3921 France .2087 4.7920 Germany .7291 1.3715 Great Britain 1.6120 .6203 Italy .000584 1713.00 Japan .011624 86.03