Further Fed Rate Cut Likely
It looks ever-more likely the Federal Reserve will again lower interest rates. The USD fell against the Euro on speculation of such a rate cut.
The Greenback fell the most in two weeks against the Euro after a private report showed US consumer confidence fell further than expected in March.
According to Samarjit Shankar, director of global strategy for Forex group in Boston at Bank of New York said “The economy in the U.S. will deteriorate further.” - Bloomberg
The Chicago Board of Trade Futures contracts show a 34 percent chance the Fed will reduce the interest rate bya half percent on April 30th.
Deutsche Bank claimed that the US economy fell into recession during the first quarter of 2008, and will remain there in the second quarter of 2008. Although there is potential for the USD to strengthen, it is possible the currency will fall to $1.60 against the Euro during the first half of 2008.
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