/www.fxserver.com/The dollar was rangebound in midmorning trade on technically-driven short-covering following a sell-off overnight after a weaker-than-expected US ISM manufacturing survey for August and the sharp decline on Wall Street overnight, dealers said.
The Institute for Supply Management (ISM) said its overall index of business activity was 50.5 in August, the same level as July, compared with the consensus forecast of Wall Street economists for the index to rise to 51.1.
The DJIA closed down 355.45 points, or 4.1%, at 8,308.05, the SP 500 down 38.05, or 4.15%, at 878.02, and the Nasdaq composite lost 51.02, or 3.88%, at 1,263.83.
Jitsuo Tachibana said that despite the relative steadiness this morning, the dollar is expected to remain exposed to downside risk due to increased wariness about the near-term prospects for the US economy and markets.
"The euro now seems to attracting strong interest as a safe-haven amid nervousness ahead of the Sept 11 anniversary and concerns over the US economy and markets," Tachibana said.
"It is almost certain that the currency will test parity and may touch the recent high of $1.02 but it is still uncertain whether it can gain further ground beyong that level.
"To justify a sustained rally above parity, the euro needs to regain full confidence as a stable currency as the most recent gains are driven largely by fears over the US," he added.
The dollar was rangebound against the yen near the 117 yen level thanks partly to the sharp decline in the Nikkei 225 index to near the 9,000 point level, dealers said.
Tokyo 9.300 am New York 3.33 pm London 4.11 pm
Dollar
yen 117.09 up from 117.08 117.21
sfr 1.4694 down from 1.4716 1.4735
Euro
usd 0.9961 down from 0.9969 0.9960
stg 0.6368 down from 0.6377 0.6368
yen 116.63 down from 116.72 116.73
sfr 1.4637 down from 1.4669 1.4673
Sterling
usd 1.5642 up from 1.5632 1.5634
yen 183.15 up from 183.03 183.27
sfr 2.2984 down from 2.3003 2.3036
Australian dollar
usd 0.5450 down from 0.5484 0.5480
stg 0.3484 down from 0.3508 0.3500
yen 63.81 down from 64.20 64.23
© AFX News