The dollar and yen fell on Thursday as stabilizing stocks reduced safe haven demand. US initial jobless claims fell below 600K for the first time since January, indicating the US recession is abating. The S&P 500 rose 3.12 points to 882.68. The yen was little changed against the greenback but fell in cross trades. The European currencies rose as risk aversion subsided. The Australian and Canadian dollars advanced on improving risk sentiment and rising commodity prices.
The GBP/USD rallied after the Bank of England kept the benchmark interest rate unchanged at 0.50%, as expected, and announced no expansion of its quantitative easing policy. The pair found support in the 1.60 area, which is the uptrend that goes back to the beginning of the equity rally. If this diagonal support is broken, the GBP/USD will probably fall to 1.55. There is resistance in the 1.66 area from the triple-top.
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