The US dollar weakened against most major currencies after data showed the US economy contracted at a slower than expected pace in the second quarter, boosting morale amongst investors that the recession may be moderating. However, a sharp drop in consumer spending dampened some of that sentiment, but not enough for investors to take a chance in riskier assets. Data from the National Association of Purchasing Management-Chicago business barometer rose to 43.4 from 39.9 in June, indicating an improvement in business activity and a slowing in contraction.

The euro  extended gains against the dollar after data showed business activity in the US rose in July to its best showing since last September and eurozone unemployment was lower than expected, boosting risk appetite. Unemployment in the eurozone was 9.4% in June.

The British pound initially weakened against the dollar as investors fled to the safe haven dollar, but recouped most of those losses after stronger than expected US economic data.

The Japanese yen strengthened against the dollar after stronger than expected US economic data.c Although the yen rallied against the dollar, Japanese core consumer prices fell a record 1.7% in the year to June due to weaker household demand for goods pushing Japan further into deflation.

The Canadian dollar continued its rally against the US dollar as growing views that the global economy may be on a road to recovery, whet market appetite for risk. Although oil prices dipped below $66 and Canada 's economy contracted for the 10 th straight month in May, the loonie remains strong. Many investors have been eyeing the US equity futures for direction.

The Australian  and New Zealand  dollar strengthened against the US dollar as buoyant regional stock markets and talks of a rate hike boosted the Aussie and the Kiwi. The Aussie was further supported by stronger housing data as prices crept up in recent months.

Indicative rates:

EUR/USD 1.4205

USD/JPY 94.80

GBP/USD 1.6610

USD/CAD 1.0780

USD/MXN 13.2169

USD/CHF 1.0733

AUD/USD 0.8345

NZD/USD 0.6624

USD/DKK 5.2476

USD/SEK 7.2770

USD/NOK 6.1518

USD/TWD 32.770

USD/CNY 6.8279

10-Year Treasury Note Yield : 3.561%

Dow Jones Industrial Average : 9,181.82 + 27.28