USD Recovery
After yesterday’s 0.5% interest rate cut sent the US dollar lower against the Euro and the Swiss Franc. The USD fell to Sfr 1.0798 against the Swiss Franc and $1.4914 against the Euro.
However, Thursday saw a rally for the dollar. This came amidst failure among US bond insurers heightened fears the safety of bank assets.
“In a little more than one week, the US central bank has lowered interest rates by 125 basis points, turning the dollar into a de-facto carry trade funding currency,” said Chris Huddleston at Close Brothers. - FT.com
Experts saw economic data from Europe that may hint to underlying problems for the ECB in the coming months.
The Euro stayed relatively flat against the Yen and the Pound on fears of inflation risk for the ECB.
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