The euro eased a touch this morning after rising last night when investors sold off on the dollar following disappointing US data. At 0900, the single currency was trading down at USD1.1532, while against the UK currency, it was also softer at STG0.6940. However, according to Geraldine Concagh, senior economist with AIB Global Treasury, "Although off its lows this morning, with the data leaving the market suspicious of the US growth story, the dollar remains vulnerable to renewed pressure." "The large current account deficit and Treasury policy could also attract further dollar weakness. Data releases are thin on the ground today, which could leave currencies range bound ahead of tomorrow's non-farm payrolls and services ISM," she added.
Sterling's rise this morning represents a rebound following a fall yesterday after new Bank of England governor Mervyn King left markets thinking rates might be cut at next week's policy meeting. A better than expected UK manufacturing PMI did provide some support but markets will be closely watching the outlook for rates in the run up to next week's meeting. ///www.fxcentre.com