The dollar was nearly flat Thursday after the European Central Bank and Bank of England left their respective key interest rates unchanged. Higher interest rates can support a currency as investors transfer funds in search of better returns. The ECB and BoE maintained their rates at 1 percent and 0.5 percent, respectively, higher than the Federal Reserve's current rock-bottom range near zero. The 16-nation euro slipped to $1.4868 from $1.4888 late Wednesday, while the British pound inched up to $1.6586 from $1.6583. The dollar bought 90.78 Japanese yen, slightly higher compared to 90.74 yen. Meanwhile, rising retail sales last month and an improving picture on jobs gave the stock market a boost _ but unexpectedly, didn't harm the dollar. Over the past year, the dollar has tended to benefit from a "safe haven" play, whereupon traders buy up the dollar following worse-than-expected economic reports and corporate outlooks, or freeze-ups in credit markets. The reverse is also true: better-than-expected news tends to hurt the greenback. That means the buck tends to trade inversely to stocks, and has tumbled since spring as the Dow Jones industrials jumped higher. On Thursday, the Dow jumped about 200 points, but the dollar's value was steady. "People are probably a little cautious ahead of payrolls tomorrow, given how much the dollar's declined in the last couple days," said David Gilmore of Foreign Exchange Analytics in Essex, Conn. The dollar hit its highest point against the euro since mid-October last Thursday at $1.4681. This week, the euro has risen about 2 cents in value against the dollar, moving above $1.49 in European trading before losing ground later in the day. On Friday, the government releases employment data for October. Economists surveyed by Thomson Reuters expect the unemployment rate to rise to 9.9 percent from the 26-year high of 9.8 percent in September. In other late trading Thursday, the dollar rose to 1.0648 Canadian dollars from 1.0617 late Wednesday, and gained to 1.0165 Swiss francs from 1.0144 francs. |