The US Dollar is at a 2-month low against the major currencies after the US Federal Reserve cut interest rates by half a percentage point. The rate cut comes just 8 days after the US Federal Reserve unexpectedly cut rates by three quarters of a percentage point in order to support its deteriorating economy. ''The language in the Fed's statement was fairly strong, suggesting the Fed is still worried with the possibility of further deterioration in the U.S. economy,'' said Mark Meadows, analyst at Tempus Consulting in Washington, D.C. Dealers in the New York Board of Trade's US Dollar index reacted by pulling the US Dollar at a 2-month low. Analysts are worried about the inflationary impact of the Fed's aggresive rate cut. Despite that, they have said that Federal Reserve's main focus is to keep the US economy out of a recession.
In forex trading, the US Dollar hit a 2-month low against a basket of currencies. It hit resistance against the Euro, falling by 0.8 percent to trade at $1.4906. The Pound Sterling traded higher by more than a cent and last traded up 0.1 percent at 1.9914. The dollar also fell 0.6 percent against the Japanese Yen to trade at 106.40 Yen and hit a record low of 1.0824 Swiss Francs. It also fell against the Australian Dollar, trading at 89.95 US cents compared with yesterday's trade of 89.77 US cents.
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