(CEP News) - The effects of the Federal Reserve's interest rate cut on foreign exchange markets is wearing off as the U.S. dollar makes broad-based gains in Friday trading. On Tuesday, the Federal Open Market Committee opted to cut the Fed funds rates to a record-low range of 0-0.25%, prompting a selloff in the U.S. dollar. The U.S. dollar index fell as much as 4.682 points this week to lows of 77.678 before jumping to current levels of 81.047. The euro is now down 0.0279 to 1.3960 against the U.S. dollar. The EUR/USD had earlier fallen 0.0368 to session lows of 1.3908 at 8:25 a.m. EST. It had reached a near-three-month high of 1.4719 on Thursday. "Over the last 24 hours we've seen some astonishing moves in the currency markets, with the Euro in particular soaring yesterday, and then giving back all of its gains just as quickly. While it was on pace for its biggest ever weekly gain against the USD, it's now 'only' up about five big figures from Monday's open, and is not that far off its pre-FOMC level of around 1.38," wrote TD Securities currency strategist Jacqui Douglas. The greenback, meanwhile, is up 0.0020 to 0.6681 against the pound sterling, gradually pushing higher off session lows of 0.6585 at 11 p.m. EST last night. The U.S. dollar is flat at 1.4560 against the Australian dollar and up 0.13 points to 89.57 against the Japanese yen. The USD/JPY had fallen a total of 1.32 points to session lows of 88.43 after the Bank of Japan cut interest rates by 20 bps to 0.10%. It started to rebound off lows at 3:54 a.m. EST. Following the release of higher-than-expected Canadian consumer price index (CPI) at 7 a.m. EST, the USD/CAD has turned lower. The cross had initially risen 0.0061 to 1.2306 on the data, but is now up 0.0083 to 1.2129 during the session. ...Continued

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