U.S. dollar has already entered the Christmas flat market zone and is trading on the very low volumes. During the Asian session today it managed to lose just 0.1% to Japanese yen as the latter gained from the good news from Merrill Lynch.
Swiss National Bank chose to keep the national three-month Libor (interest rate) unchanged at 2.75% after it was increased by 0.25% back in September 2007. After this announcement Swiss franc gained a little against all other major currencies except the Japanese yen.
The United Arab Emirates decided to cut their bank repository rate by 0.25% to 5.25%; Saudi Arabia decreased its benchmark rate for deposits also by 0.25% to 4.0%; Qatar and Bahrain reduced their deposit rates by the same amount - 0.25% to 4.0%. Kuwait refrained from changing the country’s interest rate, because they’ve already removed their currency’s peg to dollar back in May 2007.
Little time remains before today’s FOMC meeting, which will decide the future target interest rate for the U.S. banks. Dollar gained a some weight against euro on some marginal expectations that Federal Reserve will cut rates by just 25 basis points instead of 50 points predicted by the current futures rate.
New Zealand dollar rose against all other major currencies after the Reserve Bank of New Zealand left the Official Cash Rate (OCR) - short-term lending interest rate - unchanged at 8.25%. And as it was hinted by Bank Governor Alan Bollard the rate is not likely to be lowered until 2009.
U.S. dollar ended this week on a rising edge against euro, pound and yen after Fed’s Chairman Ben Bernanke joined Donald Kohn in his hinting the markets, that next interest rates cut will be most probably made during FOMC’s December 11 meeting.