Interest Rates :

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The US Interest Rate in April 2007 was 5.25%.

Today, one year later the US rate is 2.25%.
The only other major trading currency which has a lower interest rate is the YEN.

European Interest Rates have remained unchanged at 4.00, while Britains rate has moved on one quarter of a percentage point since last year, for the same time period.

Very interesting times.

Inflation fears keep ECB rates on hold
By Ralph Atkins in Frankfurt

Published: April 10 2008 12:45 | Last updated: April 10 2008 12:45

Eurozone interest rates have been left unchanged at 4 per cent by the European Central Bank – a clear sign that its fears about inflation continue to outweigh worries about economic growth in the 15-country region.

The move had been widely expected and means ECB interest rates have been left unchanged since June – despite steep cuts in borrowing costs by the US Federal Reserve.
At his press conference later on Thursday, Jean-Claude Trichet, ECB president, is expected to stress the upside risks to inflation, which at 3.5 per cent in March, is at the highest level for almost 16 years.
The ECB aims to keep inflation “below but close” to 2 per cent.

Euro shows signs of end to bull run
By Peter Garnham in London

Published: May 1 2008 20:43 | Last updated: May 1 2008 20:43

Speculation that the euro’s seven-year bull run was coming to an end intensified on Thursday as the single currency fell to five-week lows against the dollar and the pound.

Many economists are reaching the view that eurozone growth has slowed to the point where the European Central Bank will have to cut interest rates or risk stunting economic growth.

Recent eurozone data have been disappointing, with German business sentiment, measured by the Ifo institute, in April recording its biggest monthly fall since September 2001, while eurozone purchasing managers’ indexes have also fallen.

The European Central Bank has so far maintained a hawkish stance on interest rates.

As the Federal Reserve has slashed its main interest rate by 3.25 percentage points to 2 per cent since the start of the market turmoil last summer, and the Bank of England cut its main lending rate by 0.75 per cent to 5 per cent, the ECB has kept its official interest rate on hold at 4 per cent.

The diverging interest rate paths between the three central banks have given investors a reason to keep buying the euro, pushing it nearly 70 per cent higher against the dollar since 2001 and up almost 30 per cent against the pound.

Last month the euro reached an all-time high of $1.6018 against the dollar and a record high of £0.8097 against the pound. But it has since fallen 3.6 per cent, on Wednesday hitting $1.5438 against the dollar and £0.7802 against the pound, its weakest level since March 25.

Oil prices 2006 - 2008