NEW YORK - The dollar bounced back from new lows versus the mark to stand virtually unchanged at midday trading Wednesday, but dealers said the greenback has nowhere to go but down.

"We're off the lows, and that is about the only good thing that can be said about the dollar," said Earl Johnson, vice president at Harris Trust and Savings.

"Volatility and a weaker dollar is the bottom line," he said. The dollar erased historical U.S. lows posted Tuesday, hitting a new all-time bottom it 1.3860 German marks this morning.

The dollar was at 1.3903 marks and 122.95 yen at midday, versus 1.3910 and 123.00 at the open.

The dollar closed Tuesday at 1.3895 marks and 122.63 yen but firmed overnight on short-covering, dealers said.

Short-term Hope

Dealers said the dollar might profit from short-covering ahead of the long-holiday weekend in the United States as traders even out positions. Caution ahead of Friday's August payrolls data also could temper dollar losses.

Economists reached by Reuters for a poll forecast a rise in payrolls of 183,000, with about 100,000 of that attributable to temporary hiring of youth.

Only a jobs figure sharply higher than expectations would help the dollar, dealers said.

The only U.S. data released Wednesday morning, July factory orders, did nothing to help the U.S. unit even though the 1.1% decline in July orders was better than the 1.7% fall expected by economists. The June figure was revised up slightly.

Awaiting a German Move

With little good news for the U.S. economy, dealers were looking for some clues to Bundesbank policy.

"The market is waiting for Thursday's Bundesbank meeting, even though they say the-re won't be a news conference afterward," said Bank of New York's Robert Ryan.

He said the Bundesbank's repurchase operations overnight did not suggest a change in interest rate policy.

Hillel Waxman, a vice president at Bank Leumi Trust Co. in New York, said the market has understood for some time" that Germany is in a recession. But he added that doesn't necessarily point to an easing of interest rates in Germany.

While Waxman said German gross national product data due for release will reduce pressure to push the mark higher against other currencies, he doesn't foresee any major correction before the French vote Sept. 20 on the Maastricht treaty that would create a more unified European monetary system.

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