Forex - Federal Reserve cut interest rate by 50bp to 1%, the lowest since 2004.

The Dollar posted a large fall on Wednesday, with the Federal Reserve delivering an interest-rate cut, easing investor concern about the world economy and reducing the need to repatriate Dollars from riskier markets.

The Federal Open Market Committee lowered its key interest rate by a 50bp to 1%, the lowest level since 2004, in a move to prevent a widening financial market crisis from tipping the US economy into a prolonged recession.

The Fed is expected to lower benchmark interest rates further in the months ahead given a downbeat economic outlook in the Fed’s policy statement on Wednesday. (more…)

Forex - Bank of Japan cut interest rate by 20bp to 0.3%

The Dollar rose against the Yen on Thursday, but was little changed against the Euro, after gains in world stock markets and an interest rate cut by the Federal Reserve on Wednesday helped ease the recent flight into the dollar. Adding to pressure on the Yen was growing speculation ahead of the Bank of Japan interest rates cut this night by 20bp to 0.3%.

The Dollar also edged higher against the Euro fueled by month-end
demand from fund managers seeking to square their books or
rebalance their portfolios.

The rebound in stocks and high-yielders came after the Federal Reserve reduced borrow (more…)

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