The U.S. dollar fell today, hitting its lowest level in more than a decade versus the Japanese Yen and also falling versus the Euro, after the U.S. Federal Reserve cut interest rates sharply to the lowest possible, compared to other major economies.
The U. S. Dollar’s plunge against the Japanese Yen had been fueling speculation that Japanese officials may have to intervene to curb the rise of its own currency, as the steep rise was hurting the nation's exporters.
On Tuesday December 16, 2008, the U.S. Federal Reserve Bank cut the Fed Funds rate to a record low, establishing a range between zero and 0.25%, compared with the current 1% level. According to the Federal Reserve, it will utilize "all available tools" in an effort to fight the current recession.
On Wednesday, December 17, 2008 in New York trading, the Euro rose to its highest level in more than 2 months against the U.S. Dollar and traded at $1.4436. Analysts predict that the Euro is likely to cross the $1.45 threshold before the end of the year. Against the Japanese Yen, the U.S. Dollar dropped to 87.15 Japanese Yen, the lowest it’s been in 13 years. The Pound Sterling fell by 1.2% against the U.S. Dollar and traded at $1.5411.