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. Last Updated: 07/27/2016

West Stocks Rattled by Lebed Firing

LONDON -- Russian President Boris Yeltsin's firing of security chief Alexander Lebed jolted the dollar higher Thursday and briefly sent European stock markets into retreat.


The dollar leaped half a pfennig as concerns about political instability in Moscow pressured the Deutsche mark, but the reaction was tempered as markets pondered what might happen next.


Share markets in Germany and France also slipped after the news from Moscow, but they later recovered.


Following a rancorous struggle in the Kremlin between Interior Minister Anatoly Kulikov and Lebed, Yeltsin appeared on television to say he had fired his security chief.


"This is disturbing news for European assets given the potential for increased political instability in Russia," said Keith Edmonds, chief analyst at IBJ International in London.


But analysts said much might depend on what Lebed did next.


"It all depends now on whether he will sit back or fight back," said Jeremy Stretch, currency strategist at Nat West Markets in London.


The mark typically comes under pressure from signs of political turmoil in Russia because of Germany's geographical proximity and economic links. The dollar ended European trading at 1.5436 marks and 112.25 yen, compared with 1.5383 and 112.22 late Wednesday.


London shares largely ignored events in Russia, and the FTSE 100 index ended 17.7 points higher, at 4,042.1.


German shares also recovered in late computerized trading, with the IBIS DAX ending up 12.44 points, at 2,717.5.