Japanese Buying Keys Dollar Rally

The dollar strengthened for the third straight day Friday in a rally powered by new signs that Japan’s interest rates will remain low and European rates will fall.

Some traders said rumors of a possible Russian military coup also helped strengthen the dollar and weaken the mark, which is vulnerable to political uncertainties in Russia because Germany is its largest trading partner.

But the main force driving the dollar higher came from Japan, where the central bank took a persuasive step to convince the market it won’t raise interest rates despite evidence that the Japanese economy is rebounding. Higher rates would boost the yen’s value but could crimp economic recovery.