22.09.2024. / 14:14
NEW YORK – The value of the euro against the dollar rose last Sunday as the US central bank cut interest rates more aggressively than expected.
PHOTO: Pixabay
The dollar index, which shows the value of the US against the six most important world currencies, weakened 0.4 percent last Sunday, to 100.74 points, close to the lowest level in a year.
At the same time, the exchange rate of the dollar against the euro fell by 0.8 percent, so the price of the euro reached 1.1160 dollars. But the American currency strengthened against the Japanese yen, by 2.1 percent, so its exchange rate jumped to 143.85 yen.
The dollar exchange rate against the euro fell significantly as the Fed cut interest rates more than expected in the first easing of monetary policy in four years.
Namely, it was estimated on the market that the central bank would reduce interest rates by 0.25 percentage points, but its leaders decided to cut the price of money by an aggressive 0.50 percentage points, in the range of 4.75 to five percent.
The leaders of the Fed announced after the regular session that inflation is gradually decreasing towards the target level of two percent and that now the risks to their goals regarding the labor market and inflation are balanced.
After raising interest rates for years to curb inflation, Fed leaders estimate that, after this aggressive cut, they will further reduce interest rates by 0.50 percentage points by the end of the year, and by a full percentage point next year.
“We are trying to achieve price stability without causing a painful increase in unemployment. This move shows our commitment to achieve that goal,” Fed President Jerome Powell said at a press conference.
Powell said that the situation in the economy is good, that it is growing, while inflation is falling. Currently, he said, he does not see anything in the economy that would indicate the possibility of a recession. Seebiz
Source: www.capital.ba
