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Dollar bounced back, euro under pressure

This article was originally published in Dairy Markets

The dollar has bounced back against major currencies this week, despite the two recent US federal funds interest rate cuts by the Federal Reserve Bank amounting to 1.25 percentage points. Against the struggling euro the dollar edged up further on Wednesday and in early trading this morning ahead of today's rate decision by the European Central Bank, due at 1245 GMT. The ECB is expected to keep the benchmark eurozone rate at 4.0%, a full percentage point above the US rate, but there is an increasingly widespread belief that the bank will have to follow the Fed and the Bank of England in cutting rates, which would undermine the euro's yield advantage.



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