(12:00 GMT - 12/12/07) The dollar gained against majors after the Feds announcement of a further cut in rates by 25bp, disappointing some traders who had bet on a steeper cut. The Feds claimed that such a move was necessary to protect the economy from the slump in the housing sector and credit market turbulence. A full 50bp should've been the answer yet the cut by only 25bp precipitated an unacceptable tumble in stocks which in turn turned into carry trades liquidation in currencies helping to boost both the dollar and the yen.

The Euro traded reasonably higher against the US dollar after the Fed lowered rates for the third time this year pushing the pair to the downside to record a high of 1.4724 and a low of 1.4639

In UK the news was mixed bringing the UK labor data in the picture which indicated that in spite of the credit crunch gripping the financial sector, UK economy remains remarkably resilient. Thereby the likelihood of any near additional cut becomes relatively remote. Today, GBP is inclining against the US dollar to record a high of 2.0457 and a low of 2.0330

The Yen declined against all of the worlds most-active currencies on speculation Japanese investors will invest in higher-yielding assets. The Yen drops against the US dollar after benefiting from the Unwinding of carry trades yesterday pushing the pair at the hour of this report to the upside to record a high of 111.37 and a low of 110.54

Today, the US calendar brings Trade Balance data given the weakness of the greenback has the potential to narrow more than the market expects. Dollar tends to be volatile as markets adjust to the FOMC Decision.