By CountingPips.com
Today’s economic news centered around the interest rate decisions coming from the Bank of England and the European Central Bank.
The Bank of England announced the decision to hold its interest rate at its lowest standing in the bank’s history at 0.50 percent as widely expected. The BOE had last reduced its interest rate by 50 basis points on March 5th and also cut its rate by the 
same amount in each of January and February. The notable news from the bank statement today was that its members “voted to continue with its programme of asset purchases financed by the issuance of central bank reserves and to increase its size by £50 billion to £175 billion” that was first announced on March 5th.
The European Central Bank, meanwhile, also held its interest rate today at its lowest standing in the banks history as widely expected. The ECB last reduced its interest rate by 25 basis points on May 7th to its current level of 1.00 percent. The ECB also had reduced the rate in April by 25 basis points and by 50 basis points in March.
Jean-Claude Trichet, the President of the ECB, commented on the economy in his press conference today saying that, “The data and survey information that have become available since our meeting on 2 July 2009 have broadly confirmed our previous expectations. While uncertainty is still high, there are increasingly signs that the global recession is bottoming out. As regards the euro area, recent surveys suggest that the pace of contraction is clearly slowing down. However, economic activity over the remainder of this year is expected to remain weak. Looking ahead into next year, after a phase of stabilisation, a gradual recovery with positive quarterly growth rates is expected.”
US Dollar gains in forex trading.
The U.S. dollar has been stronger in forex trading today against the other major currencies after the interest rate announcements. The euro, British pound, Swiss franc, Australian dollar, Canadian dollar and Japanese yen have all declined versus the American currency.
The EUR/USD pair has declined from today’s opening rate of 1.4400 dollars at 00:00GMT to trading to 1.4350 at 3:47 pm EST in the afternoon of the U.S. trading session according to currency data by Oanda.
The GBP/USD has declined from today’s opening level at 1.6980 as this currency pair trades at 1.6774. The US dollar has increased against the yen as the USD/JPY opened today at 95.06 and has advanced to trading at 95.42.
The dollar is increasing today versus the Swiss franc as the USD/CHF has gone from the 1.0622 opening rate to trading at 1.0648 while the dollar has also advanced today against the Canadian loonie as the USD/CAD has risen to trading around the 1.0772 level today after opening at 1.0712.
The Australian Aussie has fallen versus the US dollar today as the AUD/USD has declined to the 0.8388 level after opening at 0.8418. The New Zealand kiwi has been almost unchanged against the dollar as the NZD/USD has reached the 0.6703 level today after opening the day at 0.6697.
GBP/USD Chart – The British Pound falling against the US Dollar today in forex trading after the BOE increased its asset purchase program.
