Central banks issue interest rate cuts

In an effort to try to control the damage to the global economy caused by the ongoing- financial crisis, the US Federal Reserve cut US interest rates half a percentage point to 1.5 percent while at the same time the European Central Bank cut its rate to 3.75 percent, the Bank of England reduced its rate to 4.5 percent, the Bank of Canada set its interest rate at 2.5 percent and Sweden’s Riksbank cut its rate to 4.25 percent.

Additionally, China cut its interest rate for the second time in three weeks, to 6.93 percent, while Switzerland also lowered its interest rate and the Fed cut its discount rate, what it charges on direct loans to banks, to 1.75 percent.

There was also an announcement that the G-7 finance ministers and central bank leaders will meet in Washington, D. C., on Friday for talks on the current financial crisis.

The Japanese yen saw gains after interest rate cuts by some central banks did not raise confidence enough to send investors looking to buy higher-yielding currencies in purchases funded by the lower-yielding yen.

At shortly before noon in New York, the yen traded at ¥136.2941 to the euro and at ¥99.7250 to the US dollar while it was at ¥66.6611 to the Australian dollar and at ¥59.895 to the New Zealand dollar.

The US dollar was weaker versus the euro, trading at $1.3667 to the shared currency in late-morning trade in New York, but it was stronger in relation to the Mexican peso and Brazilian real, as it took 13.149 pesos to buy a dollar and the Brazilian real was trading at R$2.1970 to the greenback on a decline in demand for emerging market currencies

The South African rand lost value on declines in equities markets and as demand for higher-yielding currencies fell, trading at R9.2555 to the US dollar and at R12.667 to the euro.

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