The dollar ended mixed Friday in a market ruffled by the unexpected resignation of the French finance minister, Alain Madelin.
The resignation sent the French franc plunging and the German mark surging against the franc and other major currencies.Friday's events played out in an exaggerated fashion in a thin market with few active traders before a long holiday weekend in the United Kingdom, which celebrates its summer bank holiday on Monday.
In late New York trading, the dollar fetched 1.4720 German marks, down from 1.4737 late Thursday. The dollar rose to 96.70 Japanese yen from 96.52 late Thursday.
The French franc fell after Madelin resigned following a dispute over stripping government workers of their fringe benefits.
Late in the trading day, the dollar also fell as the U.S. bond market lost ground. With interest rates declining, returns are less attractive on dollar-denominated assets.
The dollar also was sold to take profits from gains on Thursday, when the greenback rose to a six-month intraday high against the mark after the German central bank cut two key interest rates.
"If I were somebody in that market I'd take a little profit out of it also," said Carol A. Stone, senior economist with Nomura Securities International.
But the dollar recovered somewhat from its lows of the day partly because "you have a fair number of players who are looking for levels" at which to jump in and buy, said Bruce Giammattei, a vice president at Mellon Bank in Pittsburgh.
Meanwhile, strong economic data, including a surge in July sales of existing homes, failed to boost the dollar, said Gillie Augeri, a vice president and chief dealer at Shawmut Bank in Boston.
Next week, traders will focus on Friday's economic data - the index of leading indicators, the employment report and construction spending, among them.
The data will get a good look "because of the importance to the worldwide economy of employment conditions in the United States. It affects markets and policy not only in this country but elsewhere," Stone said.
Other late dollar rates in New York, compared with late Thursday: 1.2105 Swiss francs, down from 1.2175; 5.0785 French francs, up from 5.0615; 1,618 Italian lire, up from 1,609; and 1.3447 Canadian dollars, down from 1.3543.
The dollar fell against the British pound, with sterling quoted at $1.5500, up from $1.5460.