Dollar Falls to Six-Year Low in Europe

The dollar slumped to its lowest levels in more than six years on European foreign exchange markets today.

The Reagan Administration described the fall as “steady and orderly” and hinted that a continued drop might be appropriate to help reduce a huge trade deficit.

White House spokesman Larry Speakes insisted that the Administration has set “no specific targets for the dollar,” which has fallen in line with the so-called Plaza agreement reached in September, 1985, by the United States and its major economic partners.

His remarks came in response to a report in today’s New York Times of signals from the Administration that the dollar should continue to decline even faster to offset a huge trade deficit estimated at $175 billion for 1986.

Decline Supported

Economists have generally supported the decline to make U.S. goods more competitive in foreign markets.

The dollar dipped as low as 1.8520 West German marks in thin European markets today after opening in Frankfurt at 1.8585. The last time the U.S. currency fell this low was in October, 1980. The dollar was worth around 2.02 marks a month ago.

In Tokyo, trading continued hectic. The dollar slid to 154 yen, its lowest level for three months, fanning speculation that Japan’s central bank would cut interest rates to make the yen less profitable to own.