The dollar continued on its decline through most of the trading day yesterday, but fell off a cliff in very early European trading. A coordinated central bank action to lower swap rates was the reason for the dramatic moves in the currencies this morning. The FED, ECB, BOJ, SNB, BOC, and BOE all agreed to cut the cost of providing dollar funding via swap arrangements. They also agreed to make other currencies available as needed, but the primary function of these swap arrangements was to push more dollar liquidity into the markets. Swap agreements give the banks US dollars today for euros or other currency payments at some future date. It effectively pumps fresh US dollars into the markets which will be pulled back out at some point in the future. The move was seen as necessary in order to prop up the European banks which have been hard hit by the euro financial crisis. The additional liquidity was welcomed by the markets, with the European stock markets and early US markets up nicely.