The euro hit new highs against the dollar on Thursday and sterling passed $2 for the first time since December after the European Central Bank and the Bank of England kept their main interest rates on hold.

The single currency rose as much as 0.7 per cent to $1.5378 after the ECB decided unanimously to keep interest rates at 4 per cent. Late in New York the euro was just shy of that level as stocks closed sharply lower.