Interest Rate Cut Sinks Dollar Against Euro

Berlin, Germany, January 23, 2008 -- The dollar fell against the euro Wednesday in the wake of the Fed's unusually large interest rate cut on Tuesday.

The euro rose to as high as US$1.4684 in morning European trading from US$1.4612 the night before.

The surprise reduction was the biggest one-day rate move by the U.S. central bank in more than 16 years.

Lower interest rates can jump-start a country's economy and help its export sector but can sink currency as traders transfer funds to countries where they can earn higher returns.