23 May 2007, 17:55  The dollar is down in New York

The dollar is down early Wednesday in New York after slipping across the board in early-morning trading and as investors await the conclusion of this week's U.S.-China Strategic Economic Dialogue. The British pound and Swiss franc led the charge against the greenback overnight, both strengthening on hawkish signals from the countries' respective central banks. Yet the euro, as well as the yen, followed suit early in North American trading, pushing the dollar lower in what some say is a signal that the buck's recent rally is losing steam. With no fresh U.S. data set for release Wednesday, the market is eagerly awaiting U.S. Treasury Secretary Henry Paulson's closing remarks following the conclusion of this week's U.S.-China Strategic Economic Dialogue, which began Tuesday. Paulson's closing statement is due at 11:45 a.m. EDT (1545 GMT). Early Wednesday, the euro was trading at $1.3499 from $1.3452 late Tuesday, while the dollar was at Y121.34 from Y121.58, according to EBS. The euro was at Y163.81 compared with Y163.54 late Tuesday. The dollar was at CHF1.2245 compared with CHF1.2299, while the U.K. pound traded at $1.9867 from $1.9750 late Tuesday. Overnight, the euro exhibited further weakness against the buck after Tuesday's modest losses, before abruptly reversing course early in New York. The single currency fell through the $1.3430 mark to an intra-session low of $1.3416 as stop loss orders were triggered. Yet the euro's slip did not inspire similar price action in its European counterparts as sterling gained for the third consecutive day after the Bank of England's Monetary Policy Committee gave a strong signal Wednesday that U.K. interest rates have further to rise. Minutes from the MPC's May meeting showed that its nine members unanimously backed a rate increase to 5.5% from 5.25%, and said the Committee could lift the key Bank rate again if the U.K economy develops broadly in line with its expectations. Investors upgraded their expectations for a rate hike on the back of the release, allowing sterling to climb back well above the $1.98 mark. According to some analysts, sterling's recent move higher may reinforce the growing view in the market that the greenback - which has rallied modestly over the past month - is ready for a fall, with a good number of market participants already starting to position themselves for such a move. "The fact that sterling and the Swiss franc have held above their recent lows warns that the euro's drop may be a selling climax and that the U.S. dollar's upside momentum may be slowing," Marc Chandler, global head of foreign exchange at Brown Brothers Harriman noted.

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