The dollar was mixed against major currencies on Thursday after the Bank of England cut its key rate to historic low and the European Central Bank left its rate unchanged.

The Bank of England cut its key interest rate by 50 basis points to 1 percent, a record low since the central bank was founded in 1694. This was the fifth successive month that the Bank of England has cut interest rates and it brings the cumulative reduction to 400 basis points since October.

Analysts expected the Bank of England would cut key rate to a low of 0.25 percent in the second quarter and go down to zero later. But rates near, or even at, zero are unlikely to be enough to stimulate recovery, so additional monetary measures will be needed.

The European Central Bank (ECB) kept its rate unchanged as it had signaled earlier. ECB President Jean-Claude Trichet said the bank does not regard the current interest rate level of 2.00 percent to be the limit and added that he does not exclude an interest rate cut at its policy meeting in March.

The rate decisions were in line with expectations. Rate cut usually push a currency lower, but the British pound rose against the dollar on Thursday, as the rate cut was considered positive for economy and UK home prices rose in January. House prices rose for the first time in 11 months in January, climbing 1.9 percent from December, British mortgage lender Halifax reported.

US economic data released on Thursday were mixed. The Labor Department said on Thursday that productivity rose at an annual rate of 3.2 percent in the final three months of last year, far above the 1.1 percent rise that economists had expected.

In a separate report, the Labor Department said new jobless claims jumped far more than expected to a seasonally adjusted 626,000 from the previous week.

The Commerce Department said that US factory orders dropped by 3.9 percent in December, an even bigger decline than the 3 percent that economists had been expecting. The weakness was widespread with a range of industries from autos to heavy machinery and computers all reporting big declines in demand.

The euro bought US$1.2796 in late New York trading compared with US$1.2856 it bought late Wednesday. The pound rose to US$1.4639 from US$1.4461.

The dollar fell to 1.2281 Canadian dollars from 1.2318 Canadian dollars, and rose to 1.1707 Swiss francs from 1.1584 Swiss francs. It rose to 91.45 Japanese yen from 89.54 Japanese yen.

(Xinhua News Agency February 6, 2009)