Forex News and Rumors – Afternoon Update

US Dollar Falls Ahead of Expected Rate Cut

The US dollar fell to its lowest point in two months today retreating below $1.38 per euro ahead of an expected rate cut that could see US benchmark lending rates dropping to just half a percent. More

Loonie Gains Half a Cent

While the US dollar struggled, its Canadian counterpart gained half a cent to 81.25 US cents. With US interest rates expected to be cut to near zero later today, many questions regarding how the Federal Reserve will continue to manage monetary policy within a zero-bound economy are now being asked. More

JP Morgan Predicts Currency Levels for First Quarter 2009

According to a JP Morgan report, the yen will outperform most of the major currencies while the US dollar and the British pound will likely weaken. The evaluation is for the first quarter of 2009. More

Trichet Suggests a Pause in Rate Cuts

European Central Bank (ECB) President Jean-Claude Trichet noted earlier today that there is a “limit” with regards to rate reductions. He also suggested that the ECB may have reached that limit.

“Do we have a feeling there is a limit to the decrease in rates? At this stage certainly yes,” Trichet said in an interview in Frankfurt yesterday. More

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