RTTNews - The dollar finally had a strong day versus other major currencies on Thursday, rebounding from 2009 depths as stocks lagged, fueling increased risk aversion.
Traders were presented with the final prelude to tomorrow's all-important government jobs data, as well as a pair of interest rate decisions from across the Atlantic.
While the both the European Central Bank and Bank of England held steady on interest rates, as expected, UK policy makers threw a curveball by expanding their asset purchase program.
The dollar soared versus the sterling follow the BoE move to ramp up quantitative easing measures, hitting 1.6760. With the advance, the dollar moved nearly 3 cents from its 10-month low of 1.7042, set Wednesday.
The BoE held its key interest rate at a record low of 0.5%, but announced it would add 50 billion pounds ($84 billion) to its asset-purchase program.
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 dollar also manged to firm up versus the euro, albeit more gradually. The dollar moved more than a cent away from yesterday's 8-month low of 1.4446.
Against the loonie, another higher-yielding counterpart, the dollar improved to C$1.0750, having stabilized since hitting a 10-month low of C$1.0630 earlier in the week.
Versus the yen, the dollar rose to the upper end of a two-week range, hitting 95.50 before leveling off.
In US economic news, first-time claims for unemployment benefits showed a much bigger than expected decrease in the week ended August 1st, according to a report released by the Labor Department on Thursday, with the data offsetting some of the recent concerns about the outlook for the labor market.
The report showed that initial jobless claims fell to 550,000 from the previous week's revised figure of 588,000. Economists had been expecting jobless claims to edge down to 580,000 from the 584,000 originally reported for the previous week.
Elsewhere, the value of Canadian building permits totaled $5.2 billion in June, up 1.0% from May, May, when permits leaped 17.5%, according to data released by Statistics Canada Thursday.
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