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Dollar strong after

intervention

NEW YORK: The dollar Thursday thundered into the U.S. close at its highest level in about six months against the mark and yen following concerted intervention by the Federal Reserve, Bank of Japan and Bundesbank.

The central banks took the market by surprise to buy dollar/mark and dollar/yen, taking advantage of an positive tone to the greenback to send it soaring.

"It was just central bank intervention that carried us on, triggering some stops," said Arnie Sherrer, senior dealer at Daiwa Securities International. "People jumped on the bandwagon, buying the dolllar."

At the close, the dollar was at 1.4777/87 marks, up from 1.4640/50 marks at the open and 1.4355/62 marks at Monday's close. It rose to 96.95/05 yen, from 96.00/10 yen at the open and from 93.60/70 yen at Monday's close.

Dealers estimated the Fed spent $500 million on intervention, but a few estimates exceeded $1.0 billion.

The concerted intervention was remarkable for the German central bank's participation.

"When the Buba bought dollars it was a shock to the marketplace," Sherrer said. "I dont think they had to spend too many (marks) to it get up."

Dealers said the dollar would likely continue its trend of strength, as some predict the greenback is now on track for a move to 100 yen and 1.5000 marks.

"People are going to be real cautious about getting short of dollars," said Dennis Pettit, manager of foreign exchange at Long-term Credit Bank of Japan.

Still, Pettit said he would expect to see some consolidation of the dollar's strong gains, although the market offered little resistance to the upward trend fueled by the central banks. Some Japanese banks were reportedly calling for the dollar to rise to 105-110 yen.

At the close, the dollar stood at 1.2319/29, up from 1.2230/40 Swiss at the open and from 1.1943/53 Swiss on Monday.

Sterling closed at $1.5520/30, down from $1.5630/40, and the Australian dollar changed hands at $0.7365/70, from $0.7385/90 at the open.

It was at Canadian $1.3594/99, from C$1.3563/68.

At midday, the Morgan Guaranty trade-weighted index stood at 94.2 of its 1990 trade-weighted value, from 92.6 percent on Monday.-Reuter