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Dollar recovers after Fed-triggered fall

US, WASHINGTON (NEWS OBSERVATORY) — The dollar recovered part of losses on Wednesday, while traders focused on what steps will be taken by other leading central banks after the decision of the US Federal Reserve to cut the key rate.

The Federal Reserve suddenly cut its key rate by 50 basis points on Tuesday.

The US dollar, which earlier fell during the session to a five-month low during the time against the yen, rose 0.47% to 107.63 yen by 15:48 Moscow time. Against a basket of major currencies, the dollar added 0.33%.

The euro, which has strengthened recently due to the weakening dollar, fell from a two-month high of $ 1.12 on Tuesday, falling 0.41% to $ 1.11.

“We are watching how the central bank community will now respond,” said Ned Rumpeltin, chief currency strategist at TD Securities for Europe.

Eurozone money markets are laying a 90 percent chance that the ECB will lower its key rate, which is already in negative territory, at minus 0.50%, by 10 basis points during a meeting next week.

In addition, markets see a 50 percent chance of another Fed rate cut by an additional 25 basis points in April, and some analysts suggest that the rate will reach 0% by the end of this year.

Meanwhile, the Chinese yuan in the mainland market recorded a maximum of six weeks at 6.9288 per dollar.

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Article is written and prepared by our foreign editors from different countries around the world – material edited and published by News Observatory staff in our US newsroom.