The dollar was relatively stable versus other major currencies on a hectic Thursday morning, as traders took in a pair of interest rate decisions from across the Atlantic and looked ahead to the release of the government's stress test on banks.
Thursday, the Bank of England maintained its key interest rate at a historical low and decided to continue with its scheme of asset purchases financed by the issuance of central bank reserves. The central bank raised the size of the scheme by GBP 50 billion to a total of GBP 125 billion.
Meanwhile, the European Central Bank cut its benchmark interest rate a quarter percentage point to a new low of 1 percent to pull the 16-nation economy out of its worst recession since World War II.
The dollar found its footing against the sterling following the BoE rate decision, improving to 1.5100 from a 4-month low of 1.5196.
The dollar eased a bit versus the euro follow the ECB rate announcement, slipping to 1.3355. Still, activity was subdued as traders looked ahead to the ECB's accompanying statement for further clues about the mindset of policymakers.
The buck firmed up a bit versus the yen Thursday morning, but stayed below the elusive century mark to fetch 99.25. Japanese stocks soared nearly 5% in catch-up trade after being closed for public holiday during much of the recent run-up in Asian markets.
In economic news from the US Thursday, the Labor Department reports on weekly jobless claims and first quarter labor productivity and costs.
U.S. regulators are preparing to release the eagerly awaited results of the stress tests conducted on the nation's nineteen largest financial institutions at 5 p.m. EDT today.
The results will lay out how much more capital banks might be required to raise in order to satisfy the new stringent capital requirements. Each of the nineteen institutions will be rated for their ability to weather various economic scenarios.
Leaked reports have suggested that several of the financial companies examined by the government don't need additional capital. Last night on TV, Geithner assured that none of the country's biggest banks are insolvent.
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