/www.fxserver.com/ The dollar was broadly lower in early London trade as participants expect today's string of key US releases to cast some shadow over the health of the US economy, dealers said.
Most important to the market will be this afternoon's US retail sales for Nov, Q3 current account as well as Federal Open Market Committee minutes to the Nov 6 meeting.
"Overall people are anticipating dollar negative news today," said David Mann, strategist at Standard Chartered.
Mann expects the current account to reveal another record deficit.
"A record deficit will remind people of the potential negative impact this may have on the dollar in a context of sluggish economic growth," said Mann.
Economists polled by AFX forecast the current account deficit will widen to a record $134.68 billion in the third quarter from 129.96 billion in the second quarter.
Mann expects the minutes of the FOMC meeting to confirm that the Bank's 50 basis points rate cut was an insurance against further weak data and that monetary policy is on hold. This, Mann believes, will be another negative factor for the dollar.
The Fed is now probably on hold whereas the European Central Bank is likely to cut rates further, he said.
"This will be a positive for the euro, as there is still a differential against the dollar and an ECB rate cut is growth supportive," he added.
Meanwhile, the euro moved broadly higher.
The US data overshadows developments in Europe, said David Brown chief economist at Bear Stearns.
The ECB monthly bulletin brought no major surprises and the market has decided not to react, said Audrey Childe-Freeman economist at CIBC World Markets.
"The bulletin is consistent with the growing evidences of struggling economic growth," she said.
In its December monthly bulletin released today, the ECB reiterated that its decision to cut rates aggressively was guided by the assessment that "prospects have strengthened for inflation to fall below 2% in the course of 2003 and to remain in line with price stability thereafter".
Sterling was mixed ahead of the Confederation of British Industries monthly trends survey.
"The survey will presumably be soft again, but while the consumer sector is robust at the same time the MPC is stuck and rates look set to stay on hold for some time to come," said Brown.
Elsewhere the yen was firming ahead of Japan's Tankan survey released tonight.
The market is looking for a small improvement but the survey is still stuck in negative territory and the economy looks as if it will deteriorate form here, said Brown.
London 9.35 am Tokyo 3.15 pm
Dollar
yen 123.00 down from 123.33
sfr 1.4559 down from 1.4604
Euro
usd 1.0136 up from 1.0086
stg 0.6425 up from 0.6405
yen 124.64 up from 124.39
sfr 1.4754 up from 1.4729
Sterling
usd 1.5779 up from 1.5745
yen 194.02 down from 194.18
sfr 2.2966 down from 2.2994
Australian dollar
usd 0.5640 up from 0.5614
stg 0.3575 up from 0.3565
yen 69.37 up from 69.23