Markets will continue to look to push the US dollar weaker as underlying sentiment remains fragile. It is also the case that the dollar will tend to loose support when international risk appetite is stronger and stock markets advance.
Markets will want to probe 2009 dollar lows against the major European currencies. There are still important barriers to strong Euro gains, especially given the underlying structural vulnerabilities in the economy.
Despite initial vulnerability and weakness, the dollar should be near the weakest point of its third-quarter trading range against the main European currencies.
