Dollar Trims Early Loss on G-7 Optimism

The dollar pared some early losses seen after the Group of 7 industrialized nations put an end to their two-year campaign to strengthen the U.S. currency, traders said. The dollar recovered to as high as 122.49 yen after earlier falling to as low as 120.35 yen and 1.6345 marks. The initial decline followed Saturday’s statement by G-7 finance ministers and central bankers that a “major misalignment” in foreign exchange markets has “been corrected.” Despite the dollar’s gains, it is still down from 123.20 yen in late New York trading Friday. It was quoted at 1.6490 marks, down from 1.6625 marks in New York. The latest G-7 statement isn’t enough to drive down the dollar much because U.S. interest rates remain much higher than Japan’s and Germany’s, making dollar-denominated deposits attractive to investors, traders said.