The Dollar falls as the FED keeps interest rates at an all time low

The greenback fell versus the euro as the Federal Reserve reiterated its pledge to keep the interest rates near zero for an extended period even as its $1 trillion injection into the economy helps revive the economy. “The Fed appears to be more cautious,” said Todd Elmer, currency strategist at Citigroup Inc. in New York. “The ultimate outcome is dollar-negative as it gave a small boost to the risk appetite.” The Dollar Index, tracks the greenback against the currencies of six major U.S. trading partners including the euro and yen, decreased 0.6 percent to 75.894.“Businesses are still cutting back on fixed investment and staffing, though at a slower pace,” Chairman Ben Bernanke and his colleagues said in their statement. U.S. employers eliminated 175,000 jobs in October after a reduction of 263,000 in the previous month, according to the median forecast of 84 economists in a Bloomberg survey. U.S unemployment figures are due on the 6th of Nov at 1:30pm. The EUR/USD is currently trading at $1.4880 as of 20:35pm, GMT with a bullish trend.

The British pound rose on Wednesday after data showed a higher than expected increase in UK service sector activity and as a rebound in equity markets eased risk aversion ahead of a Bank of England policy decision on Thursday. A purchasing manager’s survey showed its services sector index rose to 56.9 from 55.3 in October. "It's a storming set of numbers. If you take the services survey with the pick-up in manufacturing earlier in the week, it does cement the view that we will get a recovery in the fourth quarter," said Brian Hilliard, economist at Societe Generale. Analysts expect the BoE to keep interest rates at their 0.5 percent record low but many see an extension of its quantitative easing program to inject liquidity into the economy which may devalue the pound. The GBP/USD is currently trading at $1.6580 as of 20:42pm, GMT with a bearish trend.

Canada’s currency also known as the loonie traded higher against the greenback after the U.S. Federal Reserve reiterated its intention to keep interest rates “exceptionally low” for “an extended period” and said the U.S. economy is picking up. The Bank of Canada on Oct. 20 reiterated a conditional commitment to leave its key interest rate at a record low 0.25 percent through June 2010, and bank Deputy Governor John Murray repeated that today in a speech in Prince George, British Columbia. The Canadian currency pared gains late Wednesday after crude, the nation’s biggest export, retreated from its high of the day. Stocks rose. The USD/CAD is currently trading at 1.0620 as of 20:50pm, GMT with a bullish trend.

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