P.M. BRIEFING : Dollar Surges to 2 1/2-Year High
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LONDON — The dollar surged to 2 1/2-year highs on world markets today after the Commerce Department released better-than-expected U.S. trade figures.
The dollar hit 1.96 marks after news that the March trade deficit narrowed to $8.86 billion from a revised $9.82 billion in February. Later in New York the rally did not lose steam and the dollar rose to 1.9720 marks.
Dealers said the trade figure indicated an improvement in the U.S. economy that would make dollar investments even more attractive.
“This is an incredible number,” said Marc Cohen, corporate foreign exchange manager at Republic National Bank of New York.
The dollar jumped by more than one pfennig on the news. It had closed in London on Tuesday night at 1.9415 marks.
The dollar has now pushed ahead by more than five pfennigs in the last eight sessions, sparked by fresh investor confidence in the U.S. government’s fight against inflation. The rise is prompting talk of a two-mark dollar in the near future.
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