The US dollar strengthened against the majors today as recovering US economic data provided much needed confidence to market participants today. The ISM Non-Manufacturing Composite showed service industries grew in July - rising to 54.3 from 53.8 in June. On the employment side, ADP Employment data reported an increase of 42k private sector jobs in July compared to 19k in June. Challenger Grey and Christmas reported that planned layoffs declined by 57.2% vs. last month's 53.8%. Ahead this week, significant nonfarm payrolls and unemployment rate are scheduled to be released on Friday. Should data post further positive payroll figures, investors may see a surprise uptake of the dollar.

The euro traded lower after final services PMI data printed weaker than the initial reading. Furthermore, positive US ISM Non-Manufacturing index moved the EUR/USD pair back down below the 1.3200 level. Despite today's setback, the euro will likely make another bull run when ECB President Trichet makes his statement following the European Central Bank rate announcement this Thursday. Trichet is expected to remain optimistic given the recent releases of positive economic figures.

The British pound fell from yesterday's highs against the dollar after UK PMI missed the target, posting 53.1 vs. 54.4 previous and 54.5 eyed. The weak data suggests that output and new orders from the region may be slowing, further pulling the Sterling down from the 1.6000 psychological level. Ahead tomorrow, BoE will announce rates which is expected to be unchanged at 0.50%.

The Canadian dollar strengthened to the highest level since June after a rise in crude oil prices reaching $82.85/bbl. As a commodity linked currency, the Canadian dollar is benefiting from the rebound in crude oil prices from earlier lows. On the data front, unemployment rate is scheduled to be released on Friday at an expected growth of 7.9% - unchanged from last month.

The Japanese yen rose to an 8-month high against the dollar during the European trading session, before rebounding back to yesterday's level of 86.10. Japanese Finance Minister Yoshihiko Noda commented yesterday that currency price actions should be set by the market, suggesting that government will not intervene.

The Australian dollar edged higher following the release of better-than-expected trade data - 3.54B vs 1.83B previous and 1.81B eyed. The Aussie initially rose to almost a 4-month high to 0.9184 before retracing back to yesterday's high of 0.9150 after Asian stocks declined.

New Zealand's dollar fell as investors appetite for South Pacific nation's assets dampened on weakened Asian equities. Furthermore, unemployment rate for the 2nd quarter is scheduled to be released tomorrow with an expected increase of 0.2% from the previous quarter.

Indications of Overnight rates:

EUR/USD

1.3146

USD/JPY

86.26

GBP/USD

1.5875

USD/CAD

1.0191

USD/MXN

12.5540

USD/CHF

1.0512

AUD/USD

0.9156

NZD/USD

0.7344

10-Year Treasury Note Yield: 2.9403%

Dow Jones Industrial Average: 10,660.00 +23.98

This market summary is prepared by Union Bank's Global FX Department for the general information of its customers. It is based on the most accurate information currently available, but should not be considered investment advice or a guarantee of future exchange rates or trends.