Reply #3: daily dollar watch

[UpInArms]

http://quotes.ino.com/chart/?s=NYBOT_DXY0

Last trade 89.05 Change +0.10 (+0.11%)

http://www.forbes.com/personalfinance/funds/newswire/2004/06/03/rtr1394165.html

Dollar may not get much help from U.S. jobs report

NEW YORK, June 3 (Reuters) - Even if Friday's U.S. jobs report comes in much stronger than expected, any boost for the dollar is likely to be short-lived unless there is a marked improvement in the geopolitical situation in the Middle East, currency analysts say.

The prospect of a Federal Reserve interest rate hike at the end of this month has already been factored into the foreign exchange market, they say, and much of the support the dollar derived from that has already waned.

"Sentiment has soured with terrorist attacks, Iraq prison abuse" and President George W. Bush's slipping popularity in public opinion polls, said Jeremy Fand, a trader with WestLB in New York. "Evidence of this is that good U.S. data has not been met with any sustained dollar strength," he said.

The dollar has fallen about 1.3 percent against the euro since the strikingly strong April employment report was issued on May 7. The U.S. currency gained during the weeks following the report of 288,000 new non-farm jobs but has subsequently embarked on a downward course.

Economists forecast a gain of 216,000 U.S. non-farm payroll jobs for May and for the jobless rate to stick at 5.6 percent. A report in line with expectations would underscore the U.S. labor market's strength relative to Europe's.

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"Risks are skewed against the dollar," said Michael Woolfolk, senior currency strategist with the Bank of New York. "A number south of 100,000 would be negative for the dollar as it would further substantiate recent data (signaling) that the Fed need not rapidly raise interest rates to curb an overheated economy," he said.

A weaker-than-expected gain in nonfarm payroll jobs could dampen expectations of rate increases, putting a drag on the U.S. currency.

Since mid-February, when the dollar sagged to record troughs against the euro, the currency has been buoyed by the prospect of rate hikes. That is because the anticipated Fed decision to raise rates above their 46-year lows of 1 percent has put upward pressure on yields, making U.S. assets more attractive to foreign investors.

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In Friday's payrolls report, "Anything less than 150,000 (jobs gains) and we see the euro at $1.25 very fast," said WestLB's Fand. Conversely, "Above 275,000 to 300,000 gets the U.S. dollar moving higher," he said.

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http://www.fxstreet.com/nou/content/106910/content.asp?menu=forecasts&dia=462004

DAILY CURRENCY FORECAST

We prefer selling euro again today targeting 1.2150/1.2080. But watch today’s Asian market was completely muted, confusion and directionless mood prevailing among traders ahead of US Non Form Payroll due @ 12:30 GMT. Any figure +300 is going to be positive for the Green Back, anything less than 300 will pull dollar down as dollar negative sentiment already exists. So during European trading euro pair may rise till 1.2260/65 (see 1 hour raising trend channel). Whatever it is any close below 1.2240 today is crucial on weekly charts.

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Oh, the handwringing! Oh, the dilemna! Will the job numbers come in supporting the "recovery"? Gack! That would mean an interest rate hike! Oh, NO! Whatever shall they do?

Tune in at 8:30 EST and we shall find out ....

(Don't you just love cliffhangers?)

Enjoy your in-laws, Ozy :D

Have a Great Day Marketeers!