The Fusion Media Network: |
 |
Welcome,
Guest!
- BROKERS
Main Directory Promotions Interviews Compare Demo Accounts Live Accounts Special Offer - SOFTWARE
Main Charts Signals Trading Platforms - FUND MANAGERS
Main Interviews - EDUCATION
Main - MEMBERSHIP
Technical
Central Banks
Forex Brokers
Trading Tools
The Dollar to Record Lows Vs the Euro
By: Finotec - 19-09-2007
0votesThe dollar fell to a record low versus the euro on Tuesday after the Federal Reserve cut its key interest rate by an aggressive half a percentage point to prevent the U.S. economy from weakening further on turmoil in the credit and housing markets.
Policy-makers reduced the benchmark lending rate between banks by the most since November 2002 to 4.75 percent, the lowest level since May last year. It was the first rate cut in four years. The Fed also lowered the discount rate it charges for direct loans to banks by a half-point.
Traders sold the dollar as lower rates make U.S. dollar-denominated assets less attractive. Financial markets had widely expected the Fed to lower overnight borrowing costs by at least 25 basis points, but were split over whether the
move would be a more aggressive half-point. "A 50 basis point cut in the funds rate and the discount rate is a brave opening gambit in the easing cycle from a Fed
chairman that for credibility reasons was expected to err on the side of caution," said Alan Ruskin, chief international strategist at RBS Greenwich Capital, in Greenwich,
Connecticut. He said the move will also cause some to question the Fed's inflation-fighting credentials.The dollar traded around the levels of 1.3980 against the Euro, 116.15 vs. the yen and 2.0130 against the sterling at 20:37 (GMT)
"Today's action is intended to help forestall some of the adverse effects on the broader economy that might otherwise arise from the disruptions in financial markets and to promote moderate growth over time," the Fed said in a statement outlining its decision. Omer Esiner, a market analyst at Ruesch International in Washington, said, "The accompanying statement sounds a somewhat cautious tone, pointing out the Fed is a bit more worried about the fallout from the recent financial market turmoil."
Next Analysis: GBP dips on UK bank woes;US interest rate decisionContent Provided by:
Finotec
Derivative and forex trading broker Finotec is a division of leading real-time Internet trading company Finotec Trading Inc, which pioneered the world of online forex trading in 1998. After launching our revolutionary forex online trading platform in 2001, we continued to improve our services and no
Become a member and get 6 free Forex courses by OTA! - Charts
- Survey
What is your favorite platform?
Browse The Entire ForexPros.com Site:
News
Quotes
Forex Analysis
Forex Brokers
Forex Software
Live Events
Charts
Fund Managers
Education
Forex Forums
Languages
