# USA - Fed slashes rate to near 0%



## D8Lady (16 Dec 2008)

News just in "The U.S. Federal Reserve cut a key rate Tuesday to a range of between zero and 0.25 percent"


Exactly how good or bad is this?


----------



## eggerb (16 Dec 2008)

Any views on how it will affect the GBP/EUR exchange rate?


----------



## roro123 (16 Dec 2008)

Are European banks allowed to lend Dollars to their retail mortgage customers? - just a thought. I know that there would be a constant currency exposure if it was possible, but it would be interesting to know if you could refinance a mortgage into another currency? Anyone ever thought of this before?


----------



## Guest124 (16 Dec 2008)

U.S. Dollar will fall further against the Euro as will the £ sterling. This is bad news for our Economy in the short term.


----------



## melvin123 (16 Dec 2008)

> This is bad news for our Economy in the short term.


 
what about long term, can anybody see any light at the end of the tunnel? The strong € will surly cause us more problems in the long run, it seem a long time since we heard some good news.


----------



## Guest124 (17 Dec 2008)

I wouldn't argue with what you say melvin123 - I could see the U.S. and the E.U. not being the best of friends in financial term's. 2009 will be a bloodbath.


----------



## theoneill (17 Dec 2008)

This worries me. Have the US exhausted all their ammunition on this one or are there other things they can do besides reducing interest rates?


----------



## Sunny (17 Dec 2008)

theoneill said:


> This worries me. Have the US exhausted all their ammunition on this one or are there other things they can do besides reducing interest rates?


 
Yeah the FED have also announced that they are going start buying assets such as Treasuries, mortgage backed securities etc which will put even more more money into the economy and cutting credit spreads or so they hope. We are now pretty much in unchartered territory so I don't think anyone knows how this work out. Of course they are already buying commercial paper and providing a backstop to money market funds so I would be very interested in getting a look at the FED balance sheet. I reckon it could make scary reading! But they have as far as they can with regard to rates. Worrying thing was the statement saying exceptionally low rates are here for a while. Big admission for a Central Bank to make.


----------



## SlurrySlump (17 Dec 2008)

I see that this mornings Euro/$ rate is now 1.41.   If we still had the Old Punt you would get .90959 or 1.15480 sterling for your old pound.


----------



## DerKaiser (17 Dec 2008)

roro123 said:


> Are European banks allowed to lend Dollars to their retail mortgage customers? - just a thought. I know that there would be a constant currency exposure if it was possible, but it would be interesting to know if you could refinance a mortgage into another currency? Anyone ever thought of this before?


Iceland!
It's ridiculously risky for your income to be denominated in one currency and loan repayments in a different currency


----------

