The US Dollar has weakened against the Euro and the British Pound after the Fed's emergency rate cut failed to convince investors that the world's largest economy will avoid a recession. The US Federal Reserve unexpectedly cut key interest rates by three quarters of a percentage point on the 22nd of January, reacting to a global decline in stock markets. The rate cut was largest reduction in 18 years. ''The Fed easing or not, the economy is in deep trouble,'' said Lane Newman, director of forex trading in New York at ING Financial Markets LLC. ''The negative trend for the dollar still remains.'' Despite the cut, Wall Street plunged at the opening with the Dow Jones industrial average falling by 465 points before stocks rebounded. The Dow ended the day off 128.11 points at 11,971.19.
In forex trading, the US Dollar faced resistance against the Euro and the British Pound, falling by 0.4 percent to $1.4681 against the Euro from $1.4621 on the 18th of January. It also faced resistance against the British Pound, falling by 1.4 percent to $1.9828 per Pound from $1.9554. The US Dollar has declined by 1.5 percent against the Euro since it cut its interest rate. The Japanese Yen rose against the major currencies yesterday after a decline in the Standard and Poor's 500 Index reduced the incidence of carry trading.
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