Big Powers Step In to Aid Dollar

LONDON -- The world's financial giants -- the United States, Germany and Japan -- stepped in to prop up the dollar Wednesday but first signs were that the move had only limited success.


The dollar, which slid earlier in the day to near record lows against the Japanese yen, found little comfort in the concerted action by the U.S. Federal Reserve, German Bundesbank and the Bank of Japan, barely managing to hang on to its post-intervention levels.


The move by the heavyweights buoyed the dollar temporarily and it rallied above 1.38 Deutsche marks and 86 yen but the rally petered out.


"It clearly looks as if the intervention has not worked," said David Cocker, treasury adviser at Chemical Bank.


Most other European central banks shied away from joining the fray. Dealers said the Bank of France was also seen buying dollars for marks but the central bank declined to comment.


The buying marked the first round of concerted intervention in recent weeks. So far this year, the dollar has fallen more than 13 percent against the yen and 11 percent against the mark.


Dealers estimated the Fed bought about $1 billion for marks and yen. But foreign exchange dealers in Frankfurt said the Bundesbank only half-heartedly joined in the round of intervention.


The head of trading at one major Frankfurt bank said he did not believe the dollar-buying by the Bundesbank was particularly heavy.


In London, the head of foreign exchange at Kleinwort Bensen, Alan Mackenzie, said he suspected that the intervention came at the request of Washington.