Market Summary The dollar is little changed overall, recovering from earlier intra-day weakness. In fact, the greenback’s trends have been decidedly mixed today. The dollar is firmer against most Asian currencies, as downward pressures of Asian equity markets put downward pressure on regional currencies as well. But European currencies fared better in earlier trading, with the pound and the Norwegian krone doing particularly well. The U.K. was helped by firm economic figures: tomorrow the Bank of England announces its monetary policy decision, and sentiment appears to be shifting towards the central bank not expanding the existing size of its bond purchase program. As the New York day gets underway, the larger than expected fall in the July private payrolls estimate was a slight disappointment. U.S. equity futures moved slightly to the downside, and the dollar and to a lesser extent the yen made modest gains. More figures are seemingly needed to challenge the prevailing optimistic economic view: watch for the ISM services index today, and the payrolls report on Friday. Regional Highlights Asia/Pacific Asian currencies are weaker against the greenback, on balance. The won is lower by around 0.5%, while the Indonesian rupiah is also down. Indonesia central bank cut its reference rate by 25bp to 6.50%, while also hinting that further rate cuts were unlikely. In data elsewhere across the region, the Philippines July CPI slowed to just 0.2% y/y while Taiwan’s July CPI fell by 2.33% y/y. Malaysia June trade surplus eased slightly to 9.12B ringgit, though exports and imports were both down sharply on a year/year basis. The Chinese central bank repeated that it will maintain a moderate loose monetary policy, while also pledging to maintain the renminbi at a reasonable and balanced level. The NZ dollar is holding its own against the greenback, helped by a reported rise in milk powder prices, while the Australian dollar is down despite an unexpected narrowing in the June trade deficit to A$441M. Europe The pound is one of the strongest G10 currencies today, boosted by a raft of strong economic figures. The July services PMI rose further to 53.2, July house prices rose 1.1% m/m, and June industrial output unexpectedly gained 0.5% m/m. The Bank of England announces its monetary policy decision tomorrow, with a majority of primary dealers anticipating the central bank will not expand its bond purchase program. For the Eurozone the July services PMI was revised very slightly higher to 45.7, while June retail sales fell by 0.2% m/m. In other regional currency moves the Norwegian krone is stronger, but the euro and Swiss franc are lower, coming under some pressure as U.S. equity futures move to the downside. Americas The U.S. dollar is gaining some traction early in the New York session as equities move to downside. The July ADP private payrolls estimate disappointed slightly, falling by 371,000. All eyes remain on the official jobs report this Friday, where a payroll decline of 328,000 is expected. Also today, the July ISM non-manufacturing index is forecast to rise to 48.0, while June factory orders are expected to dip 0.8% m/m. The Canadian dollar is weaker against the greenback – yesterday, Canadian finance minister Jim Flaherty expressed concern about the currency’s ‘rapid’ appreciation, and said there are steps that could be taken from time to time. In other regional news Chile’s June index of economic activity fell 4% y/y, a bit more than expected, while Mexican July consumer confidence is a lso on today’s schedule.

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