NEWS / European Community

Dollar remains under pressure after last week's downbeat jobs data

July 10th - After the dollar collapse on Friday spurred by the latest disappointing payroll numbers, other major currencies have managed to hold onto the majority of their gains early in the new trading week. Overall the economic calendar is set to get off to a rather slow start but some better than expected Japanese economic data out in the last few hours ??“ namely a smaller than anticipated decline in machinery orders ??“ has seen USD/JPY tending back towards the 113.50 level. UK PPI data is set to be the next reading that may provide some substance ??“ after a run of relatively soft data, many are now suggesting that the Bank of England will leave interest rates unchanged through to the end of 2006. Obviously any emerging inflationary pressures could start to shift consensus but with unemployment readings due on Wednesday, it would likely take some solid growth here to pose any real threat to shifting consensus. Ongoing geopolitical concerns may also pressure the dollar and as a result gold can perhaps expect to continue to appreciate ??“ once again we??™re trading well past the $600/oz level ??“ but all told we??™re looking at a comparatively quiet start to the week as traders continue to eye last week??™s poor numbers from Washington.

Wayne Roworth and Enis Mehmet