US Dollar Gains against Euro and Pound after Rate Cuts

In response to the weakening European economy, central banks started slashing benchmark lending rates in attempts to jumpstart credit markets again.

While the move of cutting rates by the European Central Bank was in line with expectations of 50 basis points, bringing it to 3.25 percent, the cuts by the Bank of England shocked a lot of investors and analysts, as they cut rates by 150 basis points to 3 percent.

The U.S. dollar responded by strengthening against the two currencies, as at close to 5:00 EST it had gained by .0147 against the euro, and .0126 against the pound.