HSBC: the Fed rate cut pressure on the ECB, the euro may see a fall

The euro could fall if the Federal Reserve's decision to cut interest rates by 50 basis points puts pressure on the European Central Bank to take more drastic measures to cut rates, HSBC said. HSBC analysts said in a report, “The Fed's decision will have an impact on countries outside the U.S., particularly the eurozone.” They said faster easing by the Fed could mean fewer rate cuts overall, while the ECB's gradual approach poses a greater risk to future growth and employment. They said the euro may try to break above the key $1.12 level in the short term, but the “gravity” effect may soon take effect.