Fed and European Banks Take Action
It is h
oped that the recent coordinated rate cuts by the US Federal Reserve and European Central Banks will thaw frozen credit markets globally. The credit crisis has been trickling down into the everyday economy. Corporations are finding it difficult, if not impossible, to obtain short term loans for everyday operations and consumers are feeling the pinch in the form of tightened credit for major purchases such as autos and appliances. Despite a dismal economy the US dollar continues to hold steady providing investors with plenty of Forex opportunity.
Banks Slash Rates
The central banks slashed rates by half a percentage point and at present it is not clear how long it will take for these cuts to affect credit markets. “These credit market conditions did not happen overnight, and it’s not going to be resolved in one night, either,” said Robert Dye, senior economist for PNC Financial Services Group. Who often covers the global interbank forex marketplace. Moody’s Investors Service predicted a spike in credit defaults by risky corporate borrowers making lending a less than attractive enterprise.
