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Dollar recovers after rate move | |
(about 13 hours later) | |
The US dollar has recovered from recent lows against the euro and yen after the Federal Reserve cut interest rates by a smaller margin than expected. | |
Lower interest rates typically make the dollar and dollar-denominated assets less attractive to investors. | |
The dollar saw its biggest one-day rise against the Japanese currency since 1999 to trade at 99.55 yen. | |
The euro fell to $1.5635, down from Monday's record peak of $1.5904 hit after the meltdown of Bear Stearns. | |
The fire sale of Bear Stearns over the weekend raised fears that the credit crunch is getting worse and damaging the US economy. | |
The Federal Reserve cut US interest rates to 2.25% from 3% in an attempt to restore confidence to nervous financial markets and boost the ailing economy. | |
Markets had been betting the Fed would cut rates by a whole percentage point. | |