Another Fed meeting, another rate cut. The news that the US Federal Reserve had cut rates by another 25 basis points was hardly a surprise. It had been largely factored into markets although it did seem to stem the slow slide of the dollar against other currencies, at least temporarily.

Fed chairman Mr Alan Greenspan may take some comfort from a survey published after this week's meeting that shows the Fed's reputation rising on the back of the successive cuts in interest rates it has made this year.

After all, there were more than a few critical comments from analysts about Mr Greenspan losing his magic touch on the US economy in the past 18 months or so.

Still, it is more likely that he will be concerned that the reversal of capital flows, which has underpinned the strong dollar, does not turn into a flood. Figures out on Thursday showed that these capital flows favoured Europe in June.

Bringing the dollar down from its stubborn highs would be welcomed on both sides of the Atlantic but judging currency movements is even more delicate that forecasting broader economic health.

dcoyle@irish-times.ie