NEW YORK -- The dollar inched up against the German mark in quiet trading yesterday. Traders said investors were hesitant to keep beating down the dollar for fear that central banks would soon intervene to support the currency.
"The market's taking a breather ahead of the weekend, month-end and quarter-end," said Don Quattrucci, assistant vice president at Connecticut National Bank.
The dollar was supported yesterday by French Finance Minister Michel Sapin's remark that the 10 percent decline in the dollar over the past month was an "abnormal phenomenon which nothing in the economy justifies." Mr. Sapin said the central banks planned to curb the dollar's slide.
News that initial U.S. jobless claims plummeted 92,000, to 382,000, in the week that ended Aug. 15 also helped the dollar. But the surge lost momentum after investors discovered that 81,957 of the drop in jobless claims came from Michigan, where furloughed General Motors auto workers had returned to work.
The dollar finished at 1.4085 marks, up slightly from 1.4063 marks Wednesday.
Investors are unlikely to buy the dollar aggressively until they see signs that the Bundesbank will cut interest rates, said a trader at Commerzbank. The dollar has been under pressure because U.S. interest rates are about 6.5 percentage points lower than German rates.
Yet many traders are reluctant to sell the dollar much below 1.40 marks.