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Dollar Falls on Rate Cut, GDP Contraction

October 30, 2008 by

EUR/USD continued to rise today and showed a third day of gain on the Forex market, as the dollar fell after the yesterday’s rate cut decision. Federal Reserve reduced the funds rate from 1.5% to 1%. Another reason for the dollar’s decline were the macroeconomic indicators released in U.S. EUR/USD is currently trading near 1.3035 after reaching 1.3288 today.

The advance report for the third quarter 2008 GDP change showed a contraction by 0.3% — better than 0.5% drop expected by the analytics, but significantly worse than 2.8% growth a quarter before.

Initial jobless claims remained unchanged during the last week — at 479,000 (although the previous week’s value was upwardly revised from 478,000).

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