alt.politics.economics

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Dollar Falls, Hits New Low Vs. Euro
Tuesday September 18, 3:56 pm ET
Dollar Tumbles to New Low Against the Euro After Fed's Half-Point Rate
Cut

New York (AP) -- The dollar fell against almost all major currencies
and hit a record low against the euro Tuesday after the Federal
Reserve made an aggressive half-point cut in a key interest rate.
The euro rose as high $ after the long-awaited decision before
settling back to $ in late New York trading, up from
Monday.

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The dollar fell against the pound, too. The British currency bought
$ in New York trading, up from $ Monday.

The Federal Reserve cut its benchmark interest rate a half-point to
percent, the first reduction in this key rate in four years. Most
dealers had expected a quarter-point cut.

Lower interest rates, used to jump-start the economy, can weaken a
currency by giving investors lower returns on investments denominated
in the currency.

The Fed acted to calm financial markets afraid of an impending
recession due to a slumping housing market, credit crunch, and weak
August jobs data. There was no clear-cut signal as to future rate
cuts, however, but the Fed said it "will continue to assess the
effects of these and other developments on economic prospects and will
act as needed to foster price stability and sustainable economic
growth."

The dollar fell against the Canadian dollar to from
Monday, a new 30 year low, and was down against the Swiss franc at
from Monday. The dollar strengthened slightly against
the Japanese currency, however, rising to yen from on
Monday.