Yesterday the Dollar lost more than 1% to the Japanese Yen, reflecting the Fed’s emergency rate cut of half a point, as well as a flight to safety with investors seeking the haven of the Yen. Putting it into perspective, it’s the first time since 2008 at the peak of the financial crisis, that the American central bank has cut rates outside of a scheduled meeting. If investors weren’t scared, they will be now as the Fed’s move can be interpreted as preparation for increased challenges ahead and the negative prospects for economic growth of both the US and the rest of the world. The good news for the Dollar is that other central banks are likely to follow the lead of the Fed and announce stimulus measures soon, which will bring some relief for the greenback.
