Fed rate cut boosts euro fortunes

MARKET NEWS

The Fed’s 50 basis point inter-meeting rate cut on Wednesday provided unexpected support to the euro, with the currency gaining around three big figures to move above $0.90 by the end of the week. Factors contributing to the euro’s rally were reflected in a sharp fall in US Treasury prices as the market reassessed the consequences of the Fed’s actions.

Initial optimism that still lower rates will come from the Fed in May were tempered by expectations that the US economy may avoid recession,