The euro appreciated vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.4820 level and was supported around the $1.4755 level. The common currency reached its highest level since 16 January. The Federal Open Market Committee reduced the federal funds target rate by 50bps to 3.00% and reduced the discount rate by 50bps to 3.50%. Policymakers reported Financial markets remain under considerable stress, and credit has tightened further for some businesses and households. Moreover, recent information indicates a deepening of the housing contraction as well as some softening in labor markets. The Committee expects inflation to moderate in coming quarters, but it will be necessary to continue to monitor inflation developments carefully. Today’s policy action, combined with those taken earlier, should help to promote moderate growth over time and to mitigate the risks to economic activity. However, downside risks to growth remain. The Committee will continue to assess the effects of financial and other developments on economic prospects and will act in a timely manner as needed to address those risks. Notably, Dallas Fed President Fisher voted for no change in rates. Prior to the meeting, the market was pricing in about an 89% chance the FOMC would reduce the federal funds target rate by 50bps and there was about a 59% chance of a 75bps cut priced in. Data released in the U.S. today were a mixed bag. First, provisional Q4 GDP data printed at an annualized 0.6%, below estimates and well below Q3’s 4.9% annualized clip. Even if the Q4 number is not downwardly revised to negative territory, many traders believe the U.S. economy is heading to a recession. Second, ADP reported private sector jobs growth of 130,000 in January, a possible indication that Friday’s January non-farm payrolls tally could be above 100,000. Today’s economic data also saw the core PCE inflation index accelerate to 2.7% with the headline index was up 3.9%. A major point of weakness in today’s GDP involved business inventories. Traders are already talking about the FOMC meetings scheduled for 18 March and 30 April. Euro bids are cited around the US$ 1.4685 level.