Dollar rises as central banks keep rates steady

NEW YORK — The dollar was higher against most major currencies Thursday after the Bank of England and the European Central Bank decided to leave key interest rates unchanged.

The 15-nation euro slipped to $1.5328 in late New York trading, below the $1.5420 it bought late Wednesday. The pound was weaker at $1.9436, compared with $1.9475 the previous day.

The European Central Bank left its key interest rate unchanged at 4.25 percent Thursday, while the Bank of England kept interest rates steady at 5 percent for the fourth month running, as they both grapple with slowing economic growth as well as rising inflation.

Higher interest rates abroad can push down the dollar, as investors transfer their funds from American assets to overseas, where they can get higher returns on their investments. Lower interest rates can weigh on a currency.

On Tuesday, the Fed left its key interest rate unchanged at 2 percent. Before rising inflation forced a pause in June, the Fed had cut rates seven times in hopes of shoring up the wobbly economy.

The ECB last month moved to cool inflation by raising borrowing costs for the first time in a year, while the Bank of England has left rates unchanged since April, when it reduced its benchmark figure by a quarter of a percentage point.

After the announcement, ECB President Jean-Claude Trichet warned that inflation - which reached 4.1 percent in the euro zone in July - would remain well above its preferred level of about 2 percent for some time.

In other trading, the dollar fell to 109.45 Japanese yen from 109.54 yen, but climbed to 1.0517 Canadian dollars from 1.0477 Canadian dollars and rose to 1.0625 Swiss francs from 1.0602 francs.