The dollar rose slightly against the German mark Friday after a fifth straight day of buying by central banks managed to lift the battered currency above Thursday's record low.
The dollar ended at 1.4560 German marks and 127.80 Japanese yen, compared with 1.4550 marks and 128.40 yen Thursday.The world's central banks swooped twice into the currency markets Friday, aiming to lift the dollar from its doldrums.
In the day's first round of intervention, 13 European banks bought the dollar before the U.S. market opened.
Then, during U.S. trading, several European banks, the Bank of Canada and the Federal Reserve intervened, with the Fed buying dollars at about 1.4610 marks.
Despite their efforts, the dollar barely managed to top Thursday's record traded low of 1.4467 marks.
The central banks has intervened every day this week to prop up the dollar. But analysts say that while the massive intervention has helped, nothing short of an economic rebound will lead to a real comeback.
"When we begin to see the bottom of the economy, when things slowly start coming back, the dollar will recover, but it will be piecemeal," said Rayelle Weber Tyler at International Treasury Consulting.
The dollar has been hit by recent shifts in interest rates - higher rates in Germany and lower U.S. rates.
"Historically, if you look back at the dollar during a period of intervention, you do see a turnaround," said currency analyst David Gilmore, McCarthy, Crisanti & Maffei. "But part of what turned the market around were adjustments in interest rates."
The latest bout of intervention was unexpected amid the quiet trading, said Robert Hatcher, chief dealer at Barclays Bank.