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Dollar under pressure after a sudden Fed rate cut that scared the markets

US, WASHINGTON (NEWS OBSERVATORY) — The dollar is trading around five-month lows against the yen on Wednesday after a sudden cut in the Fed rate by 50 basis points caused even more concern about the impact of coronavirus and sent US government bond yields to record lows.

In relation to the Swiss franc, the dollar also traded for at least two years, as investors switched to traditional safe assets, considering the reduction in rates insufficient to compensate for the risks associated with the global spread of coronavirus.

On Tuesday, the US central bank unexpectedly lowered its key rate by 50 basis points to 1.00-1.50% per annum.

The euro was one of the currencies that benefited the most from the weakening dollar, as traders expected the Fed to cut rates more than the European Central Bank.

The dollar rose against the yen by 0.3% to 107.48 to 9:28 Moscow time after falling to the level of 106.85 yen – a minimum of almost five months.

In relation to the Swiss franc, the dollar is holding at 0.9577.

The yuan rose to 6.9417 per dollar, despite the fact that data released earlier on Wednesday indicated a reduction in business activity in the Chinese services sector to a historic low.

The Australian dollar has shown growth to $ 0.6593.

The euro fell to $ 1.1146, trading near the monthly peak reached on Tuesday.

The pound was trading without sharp fluctuations at the level of $ 1.2807.

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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.