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Dollar slumps

NEW YORK: The dollar tumbled from a six-month high in the U.S. after a rally on news of a cut in German interest rates gave way to waves of selling.

The Bundesbank's announcement that it was chopping 50 basis points of the discount and Lombard rates took the dollar as high as 1.4990 marks.

At midday, the dollar tumbled to 1.4760/65 marks from 1.4945/55 marks at the open and late Wednesday's 1.4830/35 marks. It slid to 96.50/60 yen from the opening at 97.20/30 yen and 96.20/30 yen late Wednesday.

July durable goods orders fell 1.7 percent - surprising many economists who had forecast a 0.8 percent gain in orders for the month.

"This dollar rallly is legitimate and we are ultimately going to go higher," said John Rothfield, international economist at Nationsbanc-CRT, who said the outlook is favourable so long as the dollar remains above 1.4650 marks.

The dollar stood at 1.2205/15 Swiss francs at midday, down from the opening at 1.2360/70 Swiss. It eased to Canadian $1.3563/68 from C$1.3572/77.-Reuter