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Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA -- Ignore unavailable to you. Want to Upgrade?

To: J.T. who wrote (5873)	1/4/2001 2:04:04 PM
From: J.T.	Respond to of 19219

Dollar Posts Biggest Gain Ever vs Euro After Fed Cuts Rates from Bloomberg By Angela Jones Sydney, Jan. 4 (Bloomberg) -- The dollar had its biggest gain ever against the two-year-old euro after an unexpected interest- rate cut by the Federal Reserve sent U.S. stocks soaring and eased concern the economy is headed for a recession. ``The U.S. dollar is likely to continue to correct some of the weakness of the past month as expectations of U.S. growth see some revival,'' said Richard Yetsenga, a currency strategist at Deutsche Bank Securities. The dollar strengthened 2.5 percent to 92.71 cents per euro, from 94.40 at the time of the Fed's rate cut yesterday. Earlier yesterday, it weakened to a six-month low of 95.70 cents per euro yesterday, on concern that the U.S. was slowing more rapidly than previously thought. The Fed's Open Market Committee lowered its target for the overnight lending rate between banks by a half-point to 6 percent, the first decrease in two years. It also cut the discount rate on loans to banks from the Fed system by a quarter point to 5.75 percent, and said it ``stands ready'' to cut the rate another 25 basis points. The Nasdaq Composite index rallied more than 14 percent after the rate move, a record gain, on optimism the central bank will keep the economy from falling into recession. The Dow Jones Industrial Average and Standard & Poor's 500 indexes also surged. The U.S. currency is still down almost 13 percent against the euro since reaching a record high on Oct. 26, as economic figures, capped by yesterday's weaker-than-forecast December manufacturing report, pointed to slowing U.S. growth. Yesterday's rally follows a losing year for all three major U.S. stock indexes that took the Nasdaq down 39 percent. Policy-makers in the euro region will decide today whether to move the European Central Bank's benchmark refinancing rate from 4.75 percent. They've kept the rate unchanged since October. Twelve of 15 economists surveyed by Bloomberg News predicted the ECB will hold its benchmark lending rate unchanged, and three said there will be one more quarter-point increase. Japan's currency had the opposite reaction to the dollar after the Fed decision, strengthening to 113.74 yen, from 114.36 Tuesday. The euro fell to 105.46 yen, from 108.81 Tuesday, its biggest drop against the yen in nine months. In other trading, the dollar rose against the British pound to $1.4899 per pound from $1.5026 in New York trading Tuesday. It also rose against the Swiss franc to 1.6321 francs from 1.5983 and against the Canadian dollar to C$1.4971 from C$1.4933 Tuesday. Best Regards, J.T.