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To: Lucretius who wrote (53935)	1/4/2001 9:48:19 AM
From: IceShark	Read Replies (1) \| Respond to of 436258

It was only a matter of time. I don't know how this will pan out but suspect it isn't going to work for long. But man, are they cranking up the spin machine to get the bubble reinflating.

To: Lucretius who wrote (53935)	1/4/2001 10:10:25 AM
From: flyboy	Read Replies (2) \| Respond to of 436258

Dollar falling??? No the rate cut will help the dollar and further decrease inflation fears IMO... news.ft.com >>>The surge in US equities, which followed the Fed decision, helped the dollar up, as did "general corrective forces following its sizeable declines since late November," said Robert Lynch, chief currency strategist at BNP Paribas in New York. The dollar lost approximately 12.5 per cent against both the euro and the Swiss franc during that period. Mr Lynch said a sustained recovery in equity prices would alleviate some concerns about funding the US current account deficit, and the negative impact that would otherwise have on the dollar. Whether the rally will be sustained remains to be seen, but "at the very least, the Fed's more pro-active response to obvious signs of weakening in the economy should help to counter growing concerns of a hard landing, and the dollar should find some benefit as a result," said Mr Lynch. <<< news.bbc.co.uk >>>>>Since July, the rate of US economic growth has been cut in half, while consumers and businesses have become more pessimistic about the future. Stock markets have also fallen sharply on fears that the slowdown will hurt profits. The Fed hopes by acting now it can prevent the slowdown turning into a recession. Will the UK follow suit? The deputy governor of the Bank of England, Mervyn King, has said that the Bank's Monetary Policy Committee would not necessarily follow the US example "What matters to us is the outlook for the British economy. We set interest rates for the UK, not the US," he said. However, there are widespread expectations in the markets that UK rates will come down eventually - and the Fed move will only increase the pressure. The UK economy is expected to slow down, and inflationary pressures appear muted. At its last meeting, two out of the nine members of the MPC voted for a rate cut. And if rates are coming down worldwide, the UK could cut rates without danger that the move would weaken sterling and thus boost inflation. Many analysts expect a rate cut later in the year of at least 0.25%. But the Bank of England may want to wait until it sees the Christmas sales figures and the March budget before taking action. <<<<<<