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10/3/07

Forex - Dollar flattens out after strong recovery; ECB, BoE in view

Forex - Dollar flattens out after strong recovery; ECB, BoE in view

Dollar flattens out after strong recovery; ECB, BoE in view

The dollar flattened against major currencies after a strong recovery yesterday, with focus squarely on US data today and central bank meetings in Europe tomorrow. In the US, the ISM non-manufacturing index and the ADP (NYSE:ADP) jobs report are due later today and will illustrate further how much impact the flagging US housing market and financial market difficulties are having on the wider economy. This in turn will help investors judge the likelihood of more cuts in US interest rates following a half-point cut two weeks ago.

Analysts at Commerzbank said the ADP report 'may provide some support for the idea Friday's (non-farm payrolls report) could show a reasonable rise' following a surprising decline in non-farm payrolls for August.

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