The dollar fell against major currencies on Wednesday after the U.S. Federal Reserve decided to cut its benchmark rate to stimulate the economy.
The Fed decided Wednesday to lower its target for the federal funds rate 50 basis points to 1 percent, a low last seen in 2003-2004. The funds rate has not been lower since 1958.
The Fed cut its interest rate earlier this month by 50 basis points in a coordinated action with other major central banks.
The pace of economic activity appears to have slowed markedly, owing importantly to a decline in consumer expenditures, the Fed said in a statement.
The central bank believed recent policy actions, including rate cuts, liquidity measures, and official steps to strengthen financial systems, should help over time to improve credit conditions and promote a return to moderate economic growth.
Major stock markets in Asia and Europe rose strongly on Wednesday. It boosted investors' confidence and risk appetite in foreign exchange trading, bolstering high-yielding currencies.
The euro bought 1.2852 dollars in late New York trading compared with 1.2597 dollars it bought late Tuesday. The pound rose to 1.6314 dollars from 1.5775 dollars.
The dollar fell to 1.1367 Swiss francs from 1.1601 Swiss francs, and fell to 97.14 Japanese yen from 97.68 Japanese yen. It fell to1.2262 Canadian dollars from 1.2914 Canadian dollars.
Source: Xinhua
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