The euro was under pressure in early deals today, as the market awaits further signs of a US recovery with the release of the ISM index later today. By 0900, the single currency was trading down at USD1.0869 and STG0.6955 with traders still reluctant to commit themselves despite an upbeat manufacturing PMI for the eurozone released yesterday. The US ISM has been trending upwards over the past number of months in line with the strengthening of economic activity since the end of the war in Iraq. A further rise is forecast for the August reading, which would be more evidence that the US economy is well on the road to recovery.
"The US has been improving since late Spring with recent data showing that the Japanese economy has picked up momentum since the Spring also," said Oliver Mangan, chief bond economist with AIB Global Treasury. "The latest releases suggest that the UK economy is also regaining momentum. The laggard is the eurozone but yesterday's data suggest that it will soon join the party," he added. He said that this means it may be tougher for the dollar to make much further headway from here. Much could depend on the relative strength of data. /www.fxcentre.com/