The Federal Reserve has decided to leave interest rates unchanged with signs that economic contraction is slowing.

The US central bank left interest rates unchanged at zero to 0.25% and said that America's economic contraction is slowing. The funds rate has been at the same level since December and is likely to stay extremely low. Indications for slowing economic contraction can be credited to information received by the Federal Open Market Committee and improvements of conditions in the financial markets in the past few months.

The central bank has also been helpful at holding down borrowing costs with promises to buy USD1.45 trillion worth of mortgage related debt and USD300 billion of Government debt. There is however a waning fear that America's budget deficit and heavy lending increases could lead to future inflation. The Federal Reserve has taken their actions into consideration and has indicated that inflation is not going to be a looming risk.

The Federal Reserve's interest decisions have the US dollar's exchange rate at GBP1.6302 and EUR1.3934.

The rates quoted above are interbank rates. Client rates may vary according to the volume and timing of the trade.