The US dollar fell vs. most major currencies today as investors took profit from yesterday's sharp gains in the safe-haven currency.  Data showed that initial jobless claims fell to 565,000, lower than forecasts of a 603,000 fall.  Wholesale inventories also fell less-than-expected in May, falling 0.8% with forecasts of a 1.0% fall.  At the G8 meetings, US authorities responded to questions about the dollar saying that US dollar will remain the world's main reserve currency.

The euro increased against the dollar as a rebound in global equities helped increase investor's risk appetite.  Germany's consumer price index rose 0.4% from the previous month and unchanged over the year, which was in line with expectations.

The British pound strengthened against the dollar after the Bank of England decided against extending its asset-purchase plan and left interest rates at a record low of 0.5%.  In recent days, analysts were worried that the BoE would increase its quantitative easing program by GBP 25 billion from its current GBP 125 billion, which would heighten fears of inflation.  The BoE said that they will review they program again next month after assessing the latest inflation projections.  Data also showed that the UK trade deficit narrowed to GBP 6.3 billion in May, the lowest in three years.  The weakening of the pound has helped the UK lower its trade deficit, as British exports become more competitive and foreign imports become more expensive.

The Japanese yen fell from yesterday's strong gains as an increase in risk appetite made investors sell the safe-haven currency.  The yen strengthened to its strongest level against the euro since May 18 to 128.95 yen/euro, and to its strongest level against the dollar since February 17 to 92.88 yesterday as concerns about a global economic recovery prompted investors to seek refuge in the currency.

The Canadian dollar recovered from a seven-week low against the dollar yesterday, as a rise in global stocks and crude oil prices increased investor's risk appetite for the commodity-linked currency.  Canadian housing starts came in better-than-expected with a total of 140,700 units in June, compared to forecasts of 130,000 units.

The Australian and New Zealand dollar both rose from seven-week lows against the dollar after a government report showing Australia's jobless rate rose less than expected.  Australia's unemployment rate climbed to 5.8% in June, less than forecasts of 5.9%.  The two currencies made rebounds against the yen after sharp drops yesterday on carry-trade unwinding.

EUR/USD            1.3963

USD/JPY             92.82

GBP/USD            1.6219

USD/CAD            1.1613

USD/MXN            13.5799

USD/CHF            1.0829

AUD/USD            0.7823

NZD/USD            0.6288

USD/DKK            5.3313

USD/SEK            7.8784

USD/NOK            6.3320

USD/TWD            32.950

USD/CNY             6.8317

10-Year Treasury Note Yield:  3.3783%

Dow Jones Industrial Average:  8,176.67 -1.74