Pushing the Greenback Around

A year after the Plaza accord, economic unity hits a low

The U.S. dollar had the financial world in a tizzy last week. Buy and sell orders for the currency flooded into markets around the world, propelled by gusts of verbiage that flew between Washington and its major foreign economic allies. Money traders from Sydney to London to San Francisco whipsawed the value of the greenback before it settled down somewhat at week's end, 2.4% higher against major currencies than the week before.

This exercise in dollar diplomacy was evidence that a spirit of economic cooperation, which prevailed only a year ago among the major Western economic powers, has seriously eroded. The...

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