The US Dollar has strengthened significantly against the Euro overnight – trading down towards $1.3400 on interbank after the Federal Reserve announced plans to help stimulate the US economy.
Their plans to to sell $400 billion of short-term treasuries and purchase and equal amount of longer term debt fell in line with market expectations, and confirmed that Federal Reserve policy makers are attempting to keep the US economy from sliding into another recession. However there are underlying concerns within markets over whether the new measure will be enough to boost the US economy.
30-year Treasury bonds surged in anticipation of central bank purchases of longer-term debt and stocks fell, pushing the Standard & Poor’s 500 Index down to the lowest level in a month, on the Fed’s assessment that market turmoil caused by Europe’s sovereign-debt crisis is taking a toll on the US economy.
In the meantime, traders are remaining focused on debt troubled Greece amid concerns that it could still default. The European economy is expected to be the focus of attention this morning with flash PMI data for the month of September due for release. A negative result is likely to weigh on the Euro.