In Brief : Dollar Surges Despite Trade News

The dollar defied gravity in hectic European trading today, surging despite a bearish set of U.S. trade figures and two reported rounds of central bank intervention.

Dealers were surprised by the dollar’s ability to shrug off the bearish factors and predicted that the U.S. currency would rise further.

News that the U.S. trade deficit widened sharply to $12.5 billion in November from a revised $10.3 billion in October surprised the market and knocked the dollar down, dealers said.

The market expected a November deficit of about $11 billion.

Dealers said the dollar’s reaction reflected a markdown in rates rather than any heavy selling, and the U.S. currency immediately bounced higher. That triggered a round of concerted intervention by the U.S. Federal Reserve, the West German Bundesbank and the central banks of France and Italy, dealers said.