Bank of England, ECB hold interest rates steady

The euro was higher briefly in relation to the greenback on Thursday, but it eased back and traded even at $1.3670 versus the dollar and at £0.6725 against sterling, unchanged in both cases.

Both the European Central Bank and the Bank of England held interest rates steady, to 4 percent and 5.75 percent, as had been expected, but ECB president Jean-Claude Trichet made remarks that led many analysts to expect an increase from the ECB in September.

Meanwhile, the yen weakened as equities markets began to recover a bit from big declines that had made investors reluctant to sell the Japanese currency to engage in risky carry trades.

By midday in New York, the yen had declined by 0.1 percent versus both the US dollar and the euro, to ¥119 and ¥162.70 respectively, while it dropped 0.2 percent to ¥241.80 in relation to sterling.

The yen was also 0.2 percent lower to ¥101.90 versus the Australian dollar and had fallen 0.3 percent lower to ¥91.17 in relation to the New Zealand dollar.

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