FOREX-Dollar falls broadly as Fed slashes interest rates

By Steven C. Johnson

NEW YORK, Jan 30 (Reuters) – The dollar sank to a fresh two-month low against a basket of major currencies on Wednesday after the Federal Reserve cut benchmark U.S. interest rates by a half percentage point and warned that more would likely be needed to support the faltering economy.

The move comes just eight days after the U.S. central bank unexpectedly cut its benchmark lending rate by three quarters of a point to boost an economy battered by a deep housing slump and a persistent credit crisis.

“The language in the (Fed’s) statement was fairly strong, suggesting the Fed is still worried with the possibility of further deterioration in the U.S. economy,” said Mark Meadows, analyst at Tempus Consulting in Washington, D.C.

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