Dec. 17 (Bloomberg) -- The dollar fell to a 13-year low against the yen and the weakest versus the euro in 11 weeks after the Federal Reserve cut its target interest rate to the lowest among the world’s industrialized nations.
The U.S. currency also declined after the central bank said it will expand purchases of debt securities to fight the recession. The yen remained higher after Japan’s finance minister said he is ready to take steps in the currency market. The British pound was near the weakest on record against the euro before the Bank of England releases minutes from its Dec. 4 meeting, when policy makers cut borrowing costs to the lowest level since 1951.
Implications:
1. They believe the economy is really a lot weaker and longer than most think.
2. If things don't turnaround - hyperinflation or a lost decade for American. They are running out of arrows.
3. US $ has been inversely correlated with S & P 500 and commodities since September. US $ tanking will trigger short-term rally in oversold equities and commodities.
DJI 8924 +359/4.20%
S&P 913 +45/5.14%
Gold 842 +6.2
Light crude Oil 43.60 -0.91
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