The euro continued to march ahead against the dollar in early deals today, hitting USD1.1668 by 0900, although it slipped a touch against sterling to STG0.7010. "September's drop in the Chicago PMI and the fall in US consumer confidence have further shaken optimism about a US recovery and thus the dollar looks set to stay under pressure," said Geraldine Concagh, senior economist with AIB Global Treasury. US Treasury yields fell in response to the weaker than expected data, while stocks ended the day with losses. Consumer confidence declined as the lack of improvement in the labour market weighed on sentiment.
The manufacturing ISM is due for release today and according to Concagh, "The index is expected to dip slightly but given the poor Chicago figure the risks lie to the downside." Most of the attention however, is likely to remain on the dollar-yen after the Bank of Japan returned to the market yesterday to help drag the dollar back from its three year lows against the yen. The Japanese Government has already pledged to do what is necessary to keep the yen from getting too strong, as the economy is suffering due to the rising cost of its exports. //www.fxcentre.com