NEW YORK -- The dollar sagged against the German mark yesterday as investors shrugged off the smaller-than-expected June U.S. trade deficit and sold the U.S. currency anyway.
The U.S. trade gap narrowed 7.7 percent, to $6.59 billion, in June. The average forecast by economists in a Bloomberg Business News survey was for a $7.2 billion deficit in June.
"Basically, today was just a continuation of the rolling bullishness for the Deutschemark," said Joe Cambria, a trader at Banque Paribas. "The dollar still seems to be under pressure against the European currencies."
The dollar closed at 1.4523 marks, down from yesterday's close of 1.4573 marks.
The dollar has been hurt for weeks because interest rates in the U.S. are so much lower than those in Germany.
The Bundesbank council is scheduled to meet today to discuss changes in fiscal policy, but traders said they don't expect the bank to raise the Lombard rate from 9.75 percent. The Bundesbank signaled as much yesterday by injecting funds into its banking system, they said.