Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Edgy Traders Send Dollar Into Decline

LONDON -- The dollar ended European trading sharply down against the Deutsche mark and Japanese yen Monday with the markets nervous over Tokyo's monetary direction ahead of a key Japanese economic survey due this week.


The dollar at the close had slipped by nearly a pfennig and a yen compared with Friday's levels in dealings that were subdued because British markets were shut for a seasonal holiday.


The weaker dollar had a depressing effect on the main European bourses, which ended down after business that was quiet because of London's closure for leisure.


A poor performance on Wall Street did nothing to dispel the gloom.


The dollar's closing level of 107.55 yen compared to Friday's 108.50 was prompted by a growing uncertainty over the direction of Japan's monetary policy.


The Bank of Japan's quarterly Tankan survey on companies' expectations of future business is out on Wednesday and is regarded as an important reference for formulating monetary policy.


Although few expect the survey to change Japan's steady monetary policy stance, markets become nervous because the lower the Tankan's index, the cloudier the outlook.


The dollar, which began sliding against the mark last week as euphoria over a German interest rate cut fizzled out, fell further Monday to end at 1.4789 marks versus Friday's figure of 1.4871.


The mark ended stronger against most European currencies as well, gaining slightly against the French franc and posting hefty gains on the lira because of renewed uncertainty about the single European currency proposed to begin in 1999.


Mark/lira was trading at 1021.85 from 1018.82 on Friday.


Italian Prime Minister Romano Prodi said in La Repubblica newspaper that Italy did not want a revision of the Maastricht criteria.


Prodi's comments come after a weekend newspaper interview by his deputy, Walter Veltroni, who said that Italy and other European countries should consider the possibility of a rethinking some of the parameters of the Maastricht treaty.