European single currencies EUR/USD fell to fresh seven-month lows on Monday before paring the losses late in the session, as the Federal Reserve rattled markets by holding an unscheduled meeting to discuss the possibility of raising a key rate charged to commercial banks on loans. Euro get more lower day by day
The EUROPEAN safe haven currency pair traded in a broad range between 1.0593 and 1.0657 before settling at 1.0636, down 0.0010 or 0.09% on the session. On Monday morning, the euro fell below 1.06 for the first time since mid-April. The euro has now closed lower against its US dollar counterpart in six of the last eight sessions. Over the last month of trading, EUR/USD has fallen by roughly 4.25% in value. Seems like a bad thing to the next future of European single currencies
On Monday morning opening market, the Federal Reserve Board of Governors scheduled a closed-door meeting, held under expedited procedures, to review the discount rates charged by its regional banks. The discussion talking, The discount rate is the interest rate charged to commercial banks on loans they receive from their regional Federal Reserve Bank lending facilities, also known as the discount window. This is the details, When the Fed increases the discount rate, it makes the borrowing costs for banks more expensive, decreasing the money supply in the system. And the direct effects is increasing safe haven currency US dollar value
Meanwhile, The discount rate differs from the Federal Funds Rate, which is the rate banks lend to one another on overnight loans for funds maintained at the Federal Reserve. In February, 2010, the Fed increased the spread between the discount rate and the top of the target range of the Federal Funds Rate to 50 basis points. It came nearly two years after the Fed reduced the spread to 25 points in March, 2008, in an effort to bolster liquidity and for better liquidity in banking industry
Source : Investing
The EUROPEAN safe haven currency pair traded in a broad range between 1.0593 and 1.0657 before settling at 1.0636, down 0.0010 or 0.09% on the session. On Monday morning, the euro fell below 1.06 for the first time since mid-April. The euro has now closed lower against its US dollar counterpart in six of the last eight sessions. Over the last month of trading, EUR/USD has fallen by roughly 4.25% in value. Seems like a bad thing to the next future of European single currencies
On Monday morning opening market, the Federal Reserve Board of Governors scheduled a closed-door meeting, held under expedited procedures, to review the discount rates charged by its regional banks. The discussion talking, The discount rate is the interest rate charged to commercial banks on loans they receive from their regional Federal Reserve Bank lending facilities, also known as the discount window. This is the details, When the Fed increases the discount rate, it makes the borrowing costs for banks more expensive, decreasing the money supply in the system. And the direct effects is increasing safe haven currency US dollar value
Meanwhile, The discount rate differs from the Federal Funds Rate, which is the rate banks lend to one another on overnight loans for funds maintained at the Federal Reserve. In February, 2010, the Fed increased the spread between the discount rate and the top of the target range of the Federal Funds Rate to 50 basis points. It came nearly two years after the Fed reduced the spread to 25 points in March, 2008, in an effort to bolster liquidity and for better liquidity in banking industry
Source : Investing
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