Fed Intervenes to Push Dollar Down; Oil Declines After OPEC Accord

Central bank intervention drove the dollar down on overseas markets Monday, while oil prices tumbled in response to an uncertain OPEC agreement.

U.S. Treasury bond prices were little changed in London, and stock prices rose in Britain and Japan. U.S. markets were closed for the Presidents’ Day holiday.

The dollar began its day in Tokyo by falling 1.02 yen to 126.93 yen. When the dollar reached 128.15 yen, the Federal Reserve and the Bank of Japan intervened to halt the greenback’s advance for the second time in a month.

The greenback ranged between 126.80 yen and 128.93 yen in Tokyo.

The dollar also fell in European activity. Traders were unwilling to take positions that would spur central banks into intervening again.

The U.S. currency closed at 1.6225 German marks, down from late Friday’s 1.6285. The British pound rose to $1.7740 from $1.7685.

Trading was very light because of the holiday in the United States.

Oil prices declined in London after the Organization of Petroleum Exporting Countries reached an uncertain agreement over the weekend to limit its daily production to just under 23 million barrels.

Traders were disappointed with the agreement and expected it to have little effect on prices. The price of North Sea Brent crude tumbled 88 cents to $17.55 a 42-gallon barrel.

While OPEC agreed to cut its production to boost oil prices, the cartel’s biggest producer, Saudi Arabia, said it was increasing its output by 100,000 barrels a day.