On Thursday the dollar has gained against the euro after central banks said they will scale back some emergency programs by which trillions of dollars have been injected into banks as financial markets stabilize.

Sterling reached near a six-month low against Euro

Sterling also reached near a six-month low against the euro after Bank of England Governor Mervyn King has told a regional British newspaper that a weak pound was been helping UK exporters and the economy cope with a sharp downturn.

US Dollar demand has increased in Carry Trades

Low interest rates as well as the vast amounts of money that has been pumped into the global economy have put pressure on the U.S. dollar and increased its appeal for use in carry trades.

What is a carry trade?

In a carry trade, an investor borrows in a low interest rate currency and the funds are used by it to invest in higher-yielding assets in other countries.

Central Banks announced their plans simultaneously

On Thursday, plans has been announced simultaneously by the Federal Reserve, Bank of England, European Central Bank and Swiss National Bank to scale back their emergency lending programs.

Fed kept interest rates at a record low

That has came a day after the Fed kept interest rates at a record low and they have also given a signal that they would stay there for a long time. At the same time, it has also been said by the Fed that to extend the life of that program it would slow purchases of mortgage debt.

Euro has dropped to 0.4%

The euro has dropped to 0.4% at $1.4667 EUR= in the early afternoon, off a session high of $1.4803 and a one-year peak of $1.4842 hit a day ago. In the final hours of the New York session the euro was falling steadily and it remained near the low of the global trading day of $1.4634.

Sterling fell 1.8% to $1.6055 GBP=

Sterling fell 1.8% to $1.6055 GBP=, for the first time since July it dropped below $1.61 , and the euro was up 1.4% at 91.35 pence EURGBP=, which is a near six-month high.

Dollar has shown a change

The dollar has shown a little change at 91.32 yen JPY=, though that was well off a 90.36 session low.

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