Dollar Falls on Interest Rates cut
Thursday, 09 October 2008

AP, NEW YORK -- The dollar fell against the other major currencies as the Federal Reserve and other central banks around the world cut interest rates in an effort to counteract a global financial meltdown.

The Fed cut its key rate to 1.5 percent from 2 percent. The Bank of England and the European Central Bank also sliced their rates by half a point, to 4.5 percent and 3.75 percent, respectively.
The central banks of China, Canada, Sweden and Switzerland also lowered their key rates.
On Wednesday, the 15-nation euro rose to $1.3695 early in New York from $1.3645 late Tuesday. The British pound edged up $1.7536 from $1.7510.
The dollar dropped to 100.86 Japanese yen from 101.71.
Cutting interest rates can stimulate economic growth and help restore confidence to markets. But doing so may undermine a currency as investors look for better returns elsewhere. The U.S. rate is now the second-lowest among the majors, higher only than Japan.
In other New York trading, the dollar fell to 1.1041 Canadian dollars from 1.1058, and slipped to 1.1340 Swiss francs from 1.1378.

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