Fed fails to sustain market rally

The news that the US Federal Reserve will leave interest rates unchanged until at least 2013 caused a brief rally in global markets Wednesday. Investor sentiment was boosted by the Fed's unprecedented announcement that it was likely to keep interest rates at extraordinarily low levels through to mid-2013. They also welcomed data showing China's export growth accelerating in July, calming fears that weak demand from Europe and the US would hit the world's second biggest economy. The Federal Reserve's move was double-edged, however. It gives a message to markets that the Fed is willing to keep things afloat, but it also acknowledges how much the US economy has weakened.