An Uncertain Dollar Is Turning Eyes To Japan And Germany

Is the dollar a prisoner of potentially damaging speculative excesses on foreign exchange markets? That's certainly a popular view on Wall Street. The financial markets have been spooked by fears that skittish currency traders would continue to push the dollar down against the German mark and the Japanese yen, thereby forcing U.S. bond rates higher and imperiling incipient recoveries overseas. Even the Clinton Administration, which once welcomed dollar weakness as a way to wring trade concessions from the Japanese, has given its blessing to efforts by the Federal Reserve and other central banks to support the dollar in currency markets.

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