Rate cuts halt EUR/USD fall
Over the past few days, the euro has finally broken out of its weeks-long slump against the dollar. Federal Reserve Chairman Ben Bernanke announced on Tuesday that the Fed would be taking the unprecedented act of buying three-month commercial paper, and today, central banks around the world made coordinated reductions in the target lending rate. Anticipating an easing of the credit squeeze that has driven the dollar’s recent rise against the euro, traders sold USD and bought EUR in today’s forex trading. As of 4PM EST, the euro had made its biggest gain against the dollar in more than two weeks, moving from 1.3585 yesterday to 1.3658.