U.S. dollar declines against sterling on BOE decision

The U.S. dollar fell against the British pound on Thursday after Bank of England (BOE) surprisingly announced that it would not provide additional stimulus.

The BOE decided to keep its main interest rate unchanged at 0.5 percent and keep the quantitative easing policy at 375 billion pounds (or 500 billion U.S. dollars).

The central bank's decision took market by surprise for Mark Carney, the governor of BOE, had indicated a cut in the bank rate days before. "The economic outlook has deteriorated and some monetary policy easing will likely be required over the summer," said Carney.

In wake of the announcement, the sterling rose against the greenback as much as 1.34 percent in late trading. The dollar index, which tracks the greenback against six major peers, was down 0.17 percent at 96.051 in late trading.

On the economic front, the U.S. Labor Department reported Thursday that in the week ending on July 9, the advance figure for seasonally adjusted initial jobless claims was 254,000, unchanged from the previous week's unrevised level and below market consensus of 265,000.

In a separate report, the department said that the Producer Price Index (PPI) for final demand increased 0.5 percent in June, seasonally adjusted, beating market estimates.

In late New York trading, the euro rose to 1.1123 dollars from 1.1110 dollars of the previous session, and the British pound climbed to 1.3323 dollars from 1.3162 dollars. The Australian dollar went up to 0.7640 dollars from 0.7614 dollars.

The dollar bought 105.38 Japanese yen, higher than 104.37 yen of the previous session. The dollar slipped to 0.9800 Swiss francs from 0.9828 Swiss francs, and it fell to 1.2879 Canadian dollars from 1.2966 Canadian dollars. Enditem