//www.ananova.com//The dollar fell back in midday trade ahead of key US data this afternoon and continuing uncertainty over the possibility of a US attack on Iraq, dealers said.
Divyang Shah, Global Strategist at IDEAglobal.com said with volumes remaining low following the UK holiday yesterday the bias is for increased volatility in the foreign exchange market."US consumer confidence and durable goods orders provide a focal point for financial markets as players try to decipher the risks of an easing from the Fed," he added.
According to an AFX poll of forecasts, US durable goods are expected to rise 2.2% in July after falling 4.1% in June while August conference board survey of consumer confidence is expected to rise to 97.4 from 97.1 the previous month. The index has declined for two months in a row and is at its lowest level since February.
Not all economists believe the US data will move markets. They cited weak base figures in previous months as one reason.While the appetite for taking on risk has improved, it has been limited by various uncertainties, among them the cloudy outlook for the US economy and stock markets as well as the war campaign against Iraq, Shah said.
But the dollar was also under pressure following hawkish comments on Iraq from the US Vice President, Dick Cheney. While not ruling out an attempt to build an international coalition Cheney dismissed the introduction of weapons inspectors"The knee-jerk reaction to gathering tension will likely see current account surplus currencies such the Swiss Franc, Norwegian Krona and yen better bid alongside gold on safe haven considerations," said Steve Pearson, head of currency strategy at HBOS Treasury Services said.
The euro ticked higher but faces the fallout from the expected weakness of the German Ifo numbers due for release tomorrow.
Analysts predict that the pivotal Ifo business climate index for August will fall for the third consecutive month, reaching 89.5 form 89.9 the previous month.Sterling and yen made some lost ground against the dollar, mirroring the general pattern of trade.
London 12.21 pm London 9.16 am

Dollar
yen 118.40 down from 118.95
sfr 1.5055 down from 1.5088
Euro
usd 0.9763 up from 0.9745
stg 0.6399 up from 0.6393
yen 115.77 up from 115.96
sfr 1.4703 unchanged 1.4703