With the U.S. equities markets continuing to sell off like double-fudge brownies (Mmmmm...

double fudge

) at a bake sale, investors are converting their funds into currency positions, with the dollar largely gaining as it is seen as a safe haven.

The

Fed's decision to cut key interest rates by 50 basis points led to an eventual large scale drop in the U.S. equity markets, as investors regarded the rate reduction as too little to stimulate the domestic economy. Meanwhile in Japan, an economy in much worse condition than that of the U.S., the stock markets rallied by a riotous 7.5% today in response to Monday's announcement of a radical monetary policy shift by the

Bank of Japan

.

The BOJ's decision is regarded as the first step in a long-overdue process of attempting to turn the economy around. Still, traders believe that the yen will continue to devalue against the dollar well into the future, as today it set new 22-month lows again against the dollar.

The dollar was most recently trading for 123.70 yen per dollar, up strong from yesterday's close of 122.28 yen.

Germany's

Ifo

business climate index, reported this morning, fell to 94.9 for February, the lowest level in over a year and a half, since July of 1999. This only furthered the belief that the global economic slowdown has indeed penetrated the euro zone.

In the wake of both Japan's policy shift and the Fed's rate cut, doubts are forming about the

European Central Bank's

willingness to incite a rally in their own economy. Traders expect that at the ECB's meeting next week, there is little chance that the committee will cut their own interest rates. And so, investors continue to trade out of the European single-currency and into dollars.

The euro was recently trading for $0.8986, far down from its last close Tuesday of $0.9092.

While "dollar/yen is largely seen as a one-way bet" as the dollar continues to rise against the yen, "The fact that the euro has not made much headway against the yen suggests that this is more of a dollar move than a euro move today," reported

Mellon Bank's

Global FX News and Views

this morning.

The euro remains trading in a very tight range against the yen as of late, hitting 111.25 yen per euro, up just barely from yesterday's close of 111.09 yen.

Consumer Price Index

(CPI) numbers out of the U.S. reported a higher-than-expected increase this morning, with the rate rising to 0.3% in February, rather than the expected 0.2%. Still, this is well below the 0.6% climb reported for January. The data had little effect on currency trading today.

The dollar's strong gains are extending to all the major currencies today. The British pound is following the euro down in value against the dollar, recently trading for $0.4280, having closed yesterday at $1.4354.

The U.S. dollar is rising against the rest of the dollar bloc also. The Aussie dollar was most recently trading for $0.4977, having dropped back below the key 50 cent level. The Australian currency has been faring terribly of late due to its own economic woes as the global meltdown invades the land down under. The Aussie dollar closed yesterday at $0.5012.

The U.S. dollar was most recently trading for C$1.5722, up strong from yesterday's closing price of C$1.5648.

The Israeli shekel is also falling sharply against the dollar today, another victim of the large-scale conversion to the dollar as a safe haven. The shekel hit new ten-month lows vs. the dollar today, trading most recently at 4.197 shekels per dollar.