Global Interest Rates Drop, US Dollar Rises
The Bank of England and European Central Bank slashed their interest rates to record lows today in an effort to bolster access to credit and contain the impact of a deepening recession.
The Bank of England’s Monetary Policy Committee decided to slash its interest rate by 50 basis points to 0.5%, sending its key rate to its lowest level on record. The BoE also announced that it will begin a "quantitaive easing" program.
- Bank of Engand Cuts Rates, to Buy Govt Bonds
The ECB lowered its interest rate by 50 basis points to 1.5%, marking the fifth rate cut in the past six months.
Analysts widely expected a move by the European Central Bank, as weak economic data in the 15-nation eurozone along with easing inflation has given the ECB room for further rate cuts.
- ECB Cuts Rate to 1.5%, Mulls New Measures
The dollar index , which tracks the greenback’s standing against a basket of currencies, has gained 9.68% in the past three months as risk aversion amid the global financial crisis has boosted the US dollar low-yielding status as a "safe-haven" currency. The dollar index is now trading at levels not seen since early 2006.
Since early December, the US dollar has appreciated about 4% versus the pound sterling , 10% against the euro , and 9% against the Japanese yen .
Here is a look at where some of the world’s interest rates stand: