Promises of support do little to help dollar

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The Independent Online
Talk of intervention to support the dollar by the French and Japanese central banks did little to help the US currency yesterday, while unremarkable figures on sales of durable goods in the US sent bond and share prices lower.

Masayoshi Takemura, Japan's Finance Minister, said his ministry would take 'tenacious and timely' steps to stabilise the foreign exchange market. Japan has been the only central bank to confirm it has intervened in recent weeks, selling yen for dollars.

Edmond Alphandery, France's Economy Minister, said France would take part in joint action to support the dollar. He said the US economy was in good health and the currency should be strong.

The remarks did not stop the dollar from slipping in New York. It closed fractionally lower against the mark and the pound, and unchanged against the yen. The yield on the benchmark 30-year Treasury bond staying firmly above the critical 8 per cent level.

Economists blamed a fractionally bigger-than-expected rise in durable goods orders for the modest losses. New orders rose only 0.1 per cent in September, compared with a 6.4 per cent jump in August, but Wall Street analysts had predicted no increase last month.

The markets' attention is focused on figures for third-quarter national output, out on Friday, which could prompt the Federal Reserve to announce the long-awaited rise in rates.

Shares on both sides of the Atlantic took a lead from US bond markets. The Dow Jones index closed 2.36 points lower at 3,842.23. The FT-SE 100 index closed at 2,999.9, only one point down.