SYDNEY, Apr. 1, 2008 (Thomson Financial delivered by Newstex) -- The U.S. dollar was trading slightly lower on profit-taking Wednesday morning following overnight gains helped by a stronger financial sector on Wall Street after Lehman Brothers Holdings Inc. (NYSE:LEH) and Switzerland's UBS AG (NYSE:UBS) issued new shares to bolster their balance sheet. A better-than-expected Institute of Supply Management reading on the U.S. manufacturing sector, although under 50 which signals a contraction, also helped support the struggling dollar. The ISM Manufacturing Survey recorded a small improvement in March, with the headline index rising to 48.6 in March from 48.3 in February, despite expectations of a decline to 47.5. But traders said the dollar is unlikely to move out of its current trading range until after the release of all-important non-farm payroll data for March due on Friday. The consensus market forecast is for a contraction of 50,000 jobs in the non-farm sector after 63,000 jobs were lost in February. Also, Germany's Deutsche Bank (NYSE:DB) estimated first-quarter markdowns in the region of 2.5 billion euros, showing the financial sector problems stretched well beyond the U.S. Andrew Spencer at Thomson IFR said the offerings by Lehman and UBS were well received, which combined with the better-than-expected ISM data may mark a turning point in the current financial crisis. Wall Street certainly thought so, with the Dow Jones Industrial Average surging 391.47 points or 3.19 percent to 12,654.36, its third best rise this year. At 10.30 am (2330 GMT), the dollar was at 101.84 yen from 101.92 yen in late New York trade, while the euro was at 1.5606 dollars from 1.5605. Spencer said technicals point to the U.S. dollar and carry trades being overbought, so a correction or at least a period of consolidation is highly likely in the Asian session today. Tony Morriss, a senior currency analyst at ANZ Investment Bank, said the dollar has had a couple of good days helped by improved sentiment on Wall Street while the euro has been checked by writedowns by big banks. 'These losses at Deutsche and UBS is a reminder that Europe has got problems as well,' he said. Morriss said there has been a sustained break above 101 yen, helped by the U.S. share market performance and some of the reversal of the dollar/yen end of the Japanese financial year flows, while yesterday's weak Bank of Japan Tankan survey is also helping the dollar. 'The report showed the larger manufacturers expect the dollar to average 109 yen this financial year, but if that's an average I don't know whether they will see it,' Morriss said. He said there is likely to be some consolidation with the dollar possibly going back to 101 yen, but there may be good support above that level. He said the euro is also likely to consolidate but anything back towards 1.50 is unlikely. Morriss said sooner or later sentiment will shift to the non-farm payrolls data. Meanwhile, Federal Reserve chairman Ben Bernanke testifies before the joint house economic committee tonight. 'If anything Bernanke is likely to say they are dealing with their problems in the U.S. but he will still be somewhat circumspect on the economic outlook,' Morriss said. Sydney 10.30 a.m. (2330 GMT) U.S. dollar yen 101.84 sfr 1.0126 Euro usd 1.5606 stg 0.7891 yen 158.81 sfr 1.5795 Sterling usd 1.9772 yen 201.25 sfr 2.0016 Australian dollar usd 0.9084 stg 0.4593 yen 92.46 New Zealand dollar 0.7871 bruce.hextall@thomson.com - Copyright Thomson Financial News Limited 2008. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News. Newstex ID: AFX-0013-24190076 yvan your source for trading card work from home | michael karnas | 2004 euro tv | trade lead | astronomy picture of the day | day mourning national | cash money | venture capital firm | 2004 euro uefa | investment banking | china trade | trading card | online future trading | banking | future trading | forex trading | forex system profits | forex profit making | forex system trading | forex system software | software for trading | software system for forex trad | sitemap PDF sitemap (c) Copyright 2009 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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