Central banks in the US and Europe launched a fresh co-ordinated assault to ease strains in financial markets on Friday, as a fall in unemployment raised questions as to whether the US really is in recession.

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The Federal Reserve said it was increasing the size of ts credit auction facility – which offers one-month loans to banks – by half to $150bn.iThe Fed, the European Central Bank and Swiss National Bank announced a near-50 per cent increase in currency swaps – exchanging euros and Swiss Francs for dollars – allowing European authorities to provide more dollars to their banks.