The dollar firmed across the board Thursday, after the Federal Reserve limited easing measures to an extension of its current bond-buying program and after a negative piece of China data. The euro eased ahead of highly anticipated results of an audit of Spanish banks. The euro EURUSD -0.3262% traded at $1.2656, compared with $1.2673 in late North American trades Wednesday. The dollar index DXY +0.16% , which measures the dollar against a basket of six currencies, rose to 81.661 from 81.567 in late North American trading Wednesday. The Fed ended its two-day meeting with the announcement of a plan to extend its “Twist" bond-buying program, with Fed Chairman Ben Bernanke commenting that the central bank was ready to take more action if necessary. Any expansion of the program would have been viewed as more negative for the dollar, as it is viewed as a form of printing money. European shares were chalking up moderate losses Wednesday, outside of Spain's IBEX 35 index (XX:IBEX) -0.89% , which was underperforming with a more than 1% drop. The results of an audit of the banking sector due later Thursday is expected to show recapitalization needs of around €60 billion to €80 billion ($76 billion to $101 billion). Risk assets such as stocks and oil, were also taking a hit after initial data of a closely watched China manufacturing gauge showed further contraction in June. Investors exited oil and gold as well, and pushed toward the dollar in European trading hours. Gold for August delivery GCQ2 -1.14% slid nearly $20 to $1,596.80 an ounce, while crude for August delivery was off $1 at $80.55 a barrel. Against the Japanese yen USDJPY +0.2942% , the dollar rose to $81.68, compared with ¥79.47 late the previous day. The British pound GBPUSD -0.1234% slipped to $1.5699 from $1.5703 Wednesday.
