FINANCIAL MARKETS : CURRENCY : Dollar Dips, Pound Continues to Gain
The dollar ended mostly lower in quiet pre-holiday trading as the British pound continued to gain strength on worldwide markets.
They attributed the dollar’s decline partly to technical factors as well as sterling’s strength.
Demand for the British pound has increased in recent days amid widespread speculation that the currency would enter the European Monetary System’s exchange rate mechanism.
During a speech at London’s Institute of Economic Affairs on Monday, Karl Otto Poehl, president of the German Bundesbank, said he expected Britain’s entry into the mechanism soon.
Sterling rose to $1.7800 from $1.7635 in London, and to $1.7765 from $1.7715 in New York.
The German mark also gained against the dollar. The dollar fell to 1.6509 marks in Europe from 1.6580, and to 1.6505 from 1.6515 in New York.
The mark has remained firm in foreign exchange following the monetary union in East and West Germany over the weekend.
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