Threatened Dollar Hits 3-Month Low

The dollar suffered the worst one-day slide in three months Friday after Japan reported another bulging trade surplus and the Bundesbank’s top economist suggested it’s ready to raise interest rates.

The second straight drop in the British pound also indirectly helped drag the dollar down against most other major currencies. Traders said the dollar was further hurt by a sharp sell-off in the American stock and bond markets that briefly wrenched the Dow Jones industrial average down more than 200 points before it partly recovered.

The dollar selling at least temporarily reversed a fairly relentless rally for the currency, which had been advancing on the strength of the U.S. economy and the relative weakness in Japan and much of Europe.