Euro and pound move up on dollar

The dollar weakened against the pound and the euro after the US rate cut

The euro and the pound both rose strongly on Thursday against the dollar after the Federal Reserve's decision to cut US rates to 1% on Wednesday.

The euro rose to $1.315 against the dollar in morning trading, compared with $1.285 on Wednesday night.

The pound rose to $1.661, up from $1.631 on Wednesday night and almost 14 cents higher than last Friday's six-year low of $1.526.

Despite the rate cut, the dollar edged higher against the yen, to 98.52 yen.

By late afternoon, however, both currencies had lost most of the day's gains. The pound stood at $1.632 and the euro at $1.286.

The yen, however, strengthened against the dollar, moving to 97.86 yen.

The US rate cut ensures that "the dollar remains under pressure, at least in the short term", said Gary Thompson, head of sales trading at CMC Markets.

But with both the European Central Bank and the Bank of England expected to cut interest rates next week, the euro and the pound could soon be under similar pressure.

Interest rate cuts make currencies less attractive, as they reduce the rate of return for investors.