The dollar remained weak against the major currencies this morning ahead of inflation figures tomorrow and "confession" season on Wall St. At 0700, the euro was trading at USD1.1867, up almost one cent since Friday and heading for its all time high of USD1.1935 again. The dollar dropped on Friday following weaker than expected consumer sentiment data on Friday and a subsequent lower close on Wall St. US equity markets may continue weigh on the dollar if the Dow Jones and the Nasdaq fail to restart their recent rally. As the final weeks of the second quarter approach, investors will be expecting many companies to warn on their performance over the past three months.
Motorola and Texas Instruments have already lowered their sales estimates; as other follow suit, the bulls will be kept on the sidelines. One of the key figures this week is tomorrow's consumer price index for May. Economists expect inflation to ease 0.1pc after falling 0.3pc in April, which will increase talk of deflation in the US again and prompt further speculation of a 50 basis point rate cut by the Federal Reserve later this month. ///www.fxcentre.com