The euro opened just under par against the dollar today, as the market awaits tonight's rate decision from the Federal Reserve. At 0930, the euro was worth USD0.9967, while against sterling it stood at UK?0.6393 According to analysts, yesterday's euro rally to parity was based mainly on technical features, although a lingering doubt that a rate cut may not help the dollar also boosted sentiment towards the single currency "There's little doubt that a US cut tonight will see the USD strengthen immediately, but how long will this last? If concerns surface regarding the efficacy of a cut in stimulating the US economy, the gains might be short-lived," said Niall Dunne of Ulster Bank Financial Markets
"Although if the ECB fail to cut on Thursday (I don't expect they will), market sentiment might again turn against the ECB and then the euro," he added. He also said that, with US stocks becoming more expensive, "without any apparent underlying increase in profitability", assets flows will likely turn euro positive in the near future //www.fxcentre.com