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CURRENCIES: Dollar Dips; Euro, Pound Gain After Rate Moves

By Deborah Levine

The dollar fell slightly against the euro and the British pound on Thursday, after the European Central Bank's decision to leave interest rates unchanged and the Bank of England moved to boost its easing program.

The U.S. currency also fell slightly against the yen after the U.S. government said claims for unemployment benefits fell in the latest week, while productivity rose more than expected in the third quarter.

The British pound gained ground following the Bank of England's decision to expand its quantitative easing program by 25 billion pounds. Some in the market had expected an even bigger expansion of the program that buys up gilts and other assets.

Interest rates in the U.K. were kept at a record low of 0.5%.

The pound (CUR_GBPUSD) rose 0.1% to $1.6575.

Separately, the European Central Bank on Thursday kept its benchmark rates unchanged at 1%, as widely expected.

Speaking at a news conference after the decision, ECB president Jean Claude Trichet said risks to the outlook were "broadly" balanced and that inflation expectations were firmly anchored.

The euro gained a bit of ground against the dollar, rising to $1.4880 after being in negative territory earlier in the European trading session.

The dollar index (DXY), which measures the U.S. unit against a basket of six major currencies, stood at 75.680, down slightly from 76.682 in North American trading late Wednesday.

The dollar bought 90.50 Japanese yen, down from 90.64 yen late Wednesday, as U.S. stock futures signaled a stronger open on Wall Street.

On Wednesday, the dollar lost some ground against major counterparts after the Federal Reserve left interest rates unchanged near zero and kept its commitment to exceptionally low rates.

  (END) Dow Jones Newswires
  11-05-090945ET
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