USD up versus euro, yen on Fed announcement

Story link: USD up versus euro, yen on Fed announcement

The US dollar gained on the euro and the yen after the US Federal Reserve announced that it will lend up to $200 billion in Treasuries to banks in exchange for mortgage-backed securities.

At the same time, central banks in Canada and Europe will put as much as $45 billion into their banking systems to help with liquidity there.

The hope is that these moves will stimulate lending by banks and ease the slide into recession in the United States.

At just before noon in New York, the dollar traded at $1.5323 to the euro while it was at $2.0038 in relation to the pound.

The yen declined after the announcement, to ¥102.9650 to the dollar, as investors regained their appetite for risky investments.

The Japanese currency was lower against most major currencies, trading at ¥157.7681 to the euro and at ¥206.3213 to the pound.

The South African rand, on the other hand, benefited from investors’ enthusiasm for carry trades, rising to R7.8885 to the greenback and to R12.2695 to the euro in trade in Johannesburg, while by midday in New York it was at R7.8735 to the dollar and at R12.062 to the euro.