The dollar ended mixed in volatile trade Monday, September 17, as financial markets resumed full trading for the first time since last week's deadly terrorist attacks in New York's financial district.
The euro bought 0.9241 dollars at 2100 GMT, having soared to a six-month high point of 0.9331 dollars in Europe only to slump to 0.9190 dollars soon after Wall Street opened. It was at 0.9215 dollars Friday.
The dollar meanwhile bought 117.83 yen, pulling away from a low point of 116.65 yen seen earlier in Tokyo trade, before the Japanese Finance Ministry intervened on currency markets to help stabilize the exchange rate.
The greenback was aided by an emergency half-point cut in interest rates by the US Federal Reserve, but its gains against the euro were limited as the European Central Bank responded in kind with its own 0.5-point cut. The dollar rally was cut short by the plunge on Wall Street, which saw a 7.13 percent tumble for the Dow Jones industrials and a 6.83 percent slide for the Nasdaq.
"Ultimately the market's taken heart about the 50-basis-point rate cut," said Jane Foley, a currency strategist with Barclays Capital in London. "It's very obvious that the policymakers in the US are acting very swiftly to avert any economic disaster following last Tuesday's terrible events.
US Treasury Secretary Paul O'Neill vowed the economy would prevail and the dollar remain strong after the carnage of September 11. "We continue to have the strong-dollar policy," O'Neill told CNBC television. "I do not talk about dollar policy except to say it is strong and it is good for America."
"Americans are a resilient people. Our economy is a resilient economy. We are going to persevere. We are going to prevail over the murderers," O'Neill said.
The Fed's rate cut was swiftly followed by action from the ECB and the Swiss central bank, as global central banks unleashed what appeared to be a coordinated response to last week's terrorist attacks.
"It's very, very unprecedented but we are in unprecedented times here for the moment," said Kamal Sharma, an economist with Commerzbank. "The immediate focus was on Wall Street, and while the falls were quite heavy, they were not probably as bad as the market has initially feared, hence the rally in the dollar an hour or two after the Fed rate cut," Sharma said.
In late New York trade, the dollar fell to 1.6054 Swiss francs from 1.6214 before the weekend. Sterling fell to 1.4658 dollars from 1.4715 dollar late Friday. ― (AFP, New York)
© Agence France Presse 2001
© 2001 Mena Report (www.menareport.com)
