RTTNews - The dollar rebounded versus the sterling Thursday morning in New York after the Bank of England surprised traders by announcing it would add 50 billion pounds ($84 billion) to its asset-purchase program.
As expected, the committee left its key lending rate unchanged at a record low of 0.5%.
Meanwhile, the European Central Bank kept its main policy rate at 1.0% for the third month in a row.
Along with the interest rate decisions from across the Atlantic, the labor market will be in focus once again, with the Labor Department scheduled to release its report on first time unemployment claims for the week ended August 1st.
The figure is expected to come in at 580,000 compared to 584,000 reported last week. The report will be released at 8:30 a.m. ET.
The report will be the final prelude to tomorrow's pivotal monthly jobs report from the US Labor Department.
The dollar surged higher versus the sterling after BoE policy makers felt compelled to extend quantitative easing measures.
The world economy remains in recession, though there have been increasing signs that output in the UK's main export markets is stabilizing, the central bank said. In the United Kingdom, the recession appears to have been deeper than previously thought. GDP fell further in the second quarter of 2009.
The buck rose to 1.6830 versus the red-hot sterling, moving away from Wednesday's 10-month low of 1.7042. Its been a brutal stretch for the dollar against its British counterpart, having dropped more than 35 cents from a two-decade high set early in 2009.
Against the euro, the dollar firmed up a bit in early dealing, improving to 1.4370 from yesterday's fresh 8-month low of 1.4445. In the moments after the ECB's rate call, the dollar gave back some of its early gains.
The dollar also gained a bit of ground versus the loonie, bouncing back above C$1.0740. With the modest advance, the dollar stayed away from a 10-month low of C$1.0630, set earlier this week.
Versus the yen, the dollar rose to the upper end of a two-week range, hitting 95.50 before leveling off.
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