Dollar falls as Snow rejects intervention

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The Independent Online

The Dollar dropped to a nine-year low yesterday as John Snow, the US Treasury Secretary, appeared to rule out intervening to prop up the currency, saying it was for the markets to set exchange rates.

The Dollar dropped to a nine-year low yesterday as John Snow, the US Treasury Secretary, appeared to rule out intervening to prop up the currency, saying it was for the markets to set exchange rates.

A key index of the dollar against a basket of major currencies fell to its lowest level since November 1995, while it hovered close to all-time lows against the euro.

Gold, often seen as a counterweight to the dollar, hit a 16-year high of $440 an ounce yesterday.

During a two-day visit to Europe which began in Ireland yesterday, Mr Snow told journalists in Dublin: "Our policy on the dollar is well known. We support a strong dollar. A strong dollar is in America's interest. Markets are driven by fundamentals ... and currency values are best set in open, competitive exchange markets."

Although the Bush administration has stuck consistently to this formula of words, analysts said the comments were significant coming as Mr Snow prepared to meet his European counterparts.

Continental finance ministers, who have seen the main impact of the dollar's depreciation fall on the euro, have been calling for co-ordinated intervention by central banks to stem the rise in the euro.

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