Fed rescue revives U.S. dollar

The U.S, dollar made significant gains against foreign currency today on confidence that the Fed’s recent rate cuts will bolster the U.S. economy, according to published reports. The dollar rose to 1.5341 per euro, the largest gain since March 12, and advanced to 100.04 yen per dollar in trading in Japan today. The bump was linked in part to the Fed’s decision on March 20 to make bundled debt and mortgages eligible as collateral for auction of Treasuries, as well as its plan to swap 200 billion in T-bills for debt, some of which include mortgage-backed securities. The Fed’s rate cuts of March 18 also factored heavily in the boost in confidence. The dollar index, which rates the dollar against a number of other commodities, including the ero and the yen, rose 0.5%, while the dollar rose 0.8% versus the Swiss franc, and 0.6% against the Canadian dollar.