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To: E. Charters who wrote (21739)	10/15/1998 5:33:00 PM
From: Sergio R. Mejia	Read Replies (2) \| Respond to of 116770

Dollar ends U.S. lower after surprise Fed rate cut Thursday October 15, 5:04 pm Eastern Time (Note: this article is ''in progress''; there will likely be an update soon.) NEW YORK, Oct 15 (Reuters) - The dollar tumbled in New York on Thursday after the Federal Reserve jolted markets with its second interest rate cut in a month, and as Germany's top central banker dispelled talk of lower rates there. The Federal Reserve, in a rare inter-meeting move trimmed the overnight federal funds rate by 1/4 of a percentage point to 5.00 percent. It lowered the discount rate by the same amount to 4.75 percent. The dollar slid 1-1/2 pfennigs and 1-1/2 yen to session lows after after the rate cut, its fall slowed a bit as the Dow Jones Industrial Average rallied more than 4 percent. ''The dollar is softer because it was a surprise between-meeting move but the reaction is one where it was generally priced in,'' said Jeremy Fand, senior currency strategist at BankBoston. ''Ninety percent of people thought it would happen, they just didn't know it would be today.'' At the close, the dollar was down at 1.6160/70 marks from 1.6310/20 at the open and 1.6400/05 on Wednesday. It fell to 116.25/35 yen from 117.80/90 at the open. An easing was warranted by growing caution by lenders and unsettled financial markets that were seen restraining U.S. demand and economic growth, the Fed said in its statement. Fand contended the rate cut could be good news for the dollar down the road because the Fed has recognized and established a sense of responsibility for the health of world financial markets. More rate cuts were expected, he added. The dollar was already soft in early trade on expectations that U.S. interest rates would fall to head off a global credit crunch, with Germany's repo rate holding at 3.30 percent. Bundesbank President Hans Tietmeyer on Thursday renewed doubts that Germany would be a part of any concerted global rate cuts, warning that a monetary policy easing inconsistent with domestic stability would be ''beneficial to nobody.'' ''The mark has been firming up against almost everything after Tietmeyer's comments,'' said Christer Stefansson, of Swedbank in New York, who added ''I think Germany won't (cut rates) without the fundamental reasons like (Tietmeyer) said.'' As recently as Wednesday, other Bundesbank officials appeared to leave the door open to a possible German interest rate cut, in addition to cuts in other European Union nations. Worries about U.S. corporate exposure to emerging markets and hedge fund losses eased a bit as third-quarter corporate earnings were largely seen encouraging, lending some sense of stability to the Dow and the dollar.