Treasury and Federal Reserve foreign exchange operations: November 1990 - January 1991

The US dollar was subjected to conflicting forces during the period November 1990-January 1991. Sentiment toward dollar investments continued to deteriorate as the US economy weakened and as interest rate differentials moved further in favor of foreign currencies. However, at times, political develo...

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Bibliographic Details
Published in:Federal Reserve Bank of New York Quarterly Review 1991-12, Vol.15 (3-4), p.80
Main Authors: Cross, Sam Y, Brotman, Daniel H
Format: Article
Language:English
Subjects:
Analysis
Central banks
Economic conditions
Finance
Foreign exchange market
Foreign exchange markets
Foreign exchange rates
Interest rates
Statistical data
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Summary:The US dollar was subjected to conflicting forces during the period November 1990-January 1991. Sentiment toward dollar investments continued to deteriorate as the US economy weakened and as interest rate differentials moved further in favor of foreign currencies. However, at times, political developments abroad - particularly the Persian Gulf conflict - encouraged greater demand for dollars and limited the extent to which negative sentiment toward the currency was reflected in exchange rates. The dollar ended the period mixed against major foreign currencies, and US monetary authorities conducted no intervention operations in the foreign exchange market. The dollar closed down slightly against the German mark and up slightly against the Japanese yen. On a trade-weighted basis as measured by the staff of the Federal Reserve Board of Governors, the dollar ended the period 1% below its level at the beginning of the period.
ISSN:0147-6580