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. Last Updated: 07/27/2016

Dollar Loses Ground, but Firm

LONDON -- The dollar edged down Thursday although maintaining the firm tone sparked by Japan's latest attempt to weaken the yen, while stock markets had a losing session after their strong gains a day earlier.


The dollar ran into profit-taking after it jumped to 91.25 yen in Tokyo overnight, pausing for breath after Wednesday's frantic trading. But analysts said its upward potential remained firmly intact.


The dollar lost ground, principally against the Deutsche mark, after soaring Wednesday on the heels of Tokyo's measures to curb the powerful yen by freeing up overseas investment by insurance companies, and the United States joined Japan in a bout of intervention.


"The strength of the rally is significant ... we've had a good dollar rally which I think is quite firmly based and it should retain most of those gains," said Brian Hilliard, senior international economist at Societe Generale Strauss Turnbull. "I'm not surprised we've come off a bit."


The dollar slid to about 1.39 marks by late afternoon compared with Wednesday's late European level of 1.398. It hit 1.4035 Wednesday after the U.S. Federal Reserve and the Bank of Japan swept in to buy dollars.


The yen traded against the dollar at 90.45 to 90.50, unchanged from where it began the day in Europe but down from late Wednesday's 90.86.


European stock exchanges, which posted major gains Wednesday on the prospect of Japanese funds flowing abroad, spent the day consolidating in thin summer trading.