The US$ rose yesterday as traders bought the currency ahead of the Group of Seven meeting of industrial nations next week, which could be an opportunity to co-ordinate a rescue attempt for the flagging greenback.
"I think we are probably seeing people trying to square up their [US$] positions," international economist Kevin Harris said. "People are interested in being a little closer to neutral on the way into the meeting."
Dealers said that as the US$ rose amid strong buying interest it triggered several pre-set orders to buy, helping to add to the currency's gains.
The US$ climbed to as high as 1.3900 German marks, but by late New York trading it was at 1.3855 marks, up from 1.3705 marks late Wednesday.
It was also higher at 83.25 yen, compared with 81.25 yen in New York late Wednesday.
Finance ministers and central bankers from the G-7 will meet in Washington next Tuesday.
Due to months of volatile exchange rates, many dealers expect the G-7 to at least express a desire for stable market conditions.
However, many note that there remains a great deal of uncertainty about whether any policy pact will be signed among the nations to rescue the US$.
Japan has expressed a desire for the G-7 to come up with a clear message to the markets.
German officials, however, have repeatedly stressed that any currency weakness was primarily the responsibility of each country, dampening hopes the G-7 will emerge with a strong stance on the US$.
"The uncertainty is undoubtedly making people a little bit nervous ahead of the meeting," said Tom Benfer of Bank of Montreal.
Dealers noted that ongoing U.S.-Japan trade disputes continued to cast a pall over the market.
Despite the surging yen's crippling impact on the Japanese economy, Trade Minister Ryutaro Hashimoto said the yen's rise to recored highs on the US$ would not make Japan cave in to U.S. demands in auto trade talks.
By late New York trading, the US$ was at 1.1460 Swiss francs compared with 1.1320 francs, while the British pound inched up to US$1.6110 from US$1.6100 late Wednesday.
|This information is provided by the Financial Post.|
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Revised: June 3, 1995
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