Released on: January 23, 2008, 1:36 am

Press Release Author: finexogilad

Industry: Financial

Press Release Summary: The US Dollar pulled back against most of the major
currencies after a slash down in the interest rates by the Federal Reserve
yesterday.

Press Release Body: The US Dollar pulled back against most of the major currencies
after a slash down in the interest rates by the Federal Reserve yesterday. The US
Dollar remained volatile in the financial market that resulted panic to the Federal
Reserve. As a result, the Federal Reserve slashed its funds to 3.5 % from 4.25%. On
account of this slowdown in the global stock market, initiated by the fears of a US
recession there are expectations for further rates cut which can be executed in the
coming week.

The most astonishing thing is the biggest slash in the interest rates by the US
central bank, which can either bring back the economy to its earlier pace or can
either weigh to its currency as lower interest rates will compel the investors to
withdraw funds from low yielding currency, to the currency of that country from
where they can yield high returns. High interest rates attracts the investors and
leads to more income generation, in contrast to that lower interest rates
discourages the investment but compels the investors to borrow from the country
providing cheap financial credit and invest in high yielding assets.

The interest rate slash by the Federal Reserve washed off the gains which the Dollar
was enjoying over the European currency. However, this decline in interest rates
will raise the Euro in the short term but in the long term it will definitely bring
higher yields to the US Dollar, and will bring the US economy back to its earlier
pace which is the basic reason for the decline in interest rates by the Fed.
According to the www.forexwebtrader.com analysis report the euro which was before
trading at 1.4622$ is recently trading at a high of 1.4634$ it rebounded against the
Dollar after a month low on account of decline in the US interest rates by the
Federal Reserve.


Analysts are doubtful on account of Fed's surprising decline in interest rates
whether it will ease the fear of a recession in the US economy, as lower interest
rates contributes very little support for the weaknesses in the US housing sector
and the economy. There can also be the conditions which can be worse than ever
predicted by the investors.


Web Site: http://www.forexwebtrader.com

Contact Details: ForexWebTrader Ltd. | Palm Grove House | Road Town | Tortola |
British Virgin Islands
| Fax: +44.20.8090.3749 *Member of Finexo group