The U.S. dollar was broadly lower Thursday against the major foreign currencies. The combination of the Federal Reserve's recognition of downside risks to the U.S. economy and inflation coupled with relatively smooth bond auctions from Spain and France helped lift the euro through the $1.28 level. Sterling and the Swiss franc appeared to simply be benefiting from the softer U.S. dollar environment. Sterling was pushed above $1.5350, its best level since late April. The yen is fully participating in the move against the dollar and is holding its own on the crosses. Japanese exporters are believed to have been the main force behind the dollar's slippage below 88 yen. Near-term sentiment is decidedly dollar negative and dollar bounces will likely to continue to be sold into. Growth concerns were encouraging profit-taking on the recent stock markets' advance. The MSCI Asia-Pacific Index fell 1% as all the markets in the region fell, with Thailand being the sole exception. China's Shanghai Composite was the loss leader, with sharp losses in telecoms, technology and basic materials. Despite local declines, foreigners were again significant buyers of Korean shares and to a lesser extent Taiwanese shares. European bourses were mostly 0.25%-0.75% lower near midday in London. Of note, financials were the weakest sector in the Dow Jones Stoxx 600, (even after the better-than-expected JPMorgan Chase ( JPM)earnings) followed by basic materials. Health care and consumer goods were mitigating the overall decline. Japanese government bonds staged an impressive rally in response to the U.S. and Chinese growth outlook concerns. The 10-year yield fell 6 basis points to 1.07%. The successful reception to the Spanish 15-year bond auction has seen the benchmark 10-year drop 7 basis points; talk is that foreign investors picked up more than 50%. Other European bond markets were fairly quiet.