There will be further speculation that G7 countries will look to put a floor under the dollar as instability and sharp dollar losses would be a negative factor for the global economy. Underlying dollar confidence will still be weak which will certainly limit buying support. In the near term, there will also inevitably be caution ahead of Friday's payroll data. Overall, the dollar still has scope for a weak advance towards 1.45 over the next 24 hours.
The Chicago PMI index was significantly weaker than expected with a decline to 46.1 from 50.0 the previous month, contrary to expectations of a further modest advance. The Chicago data is erratic on a monthly view and is influenced by the auto sector, but there will be some concerns over the economic situation.
The ADP employment report was also weaker than expected with recorded net job losses of 254,000 for September following a revised 277,000 decline the previous month. The data overall will maintain expectations that the economy is recovering, but that it remains fragile with the labour market still very weak. Fed Governor Kohn stated that it was not possible to predict how rapidly interest rates would be increased.
There will inevitably be caution ahead of the Friday monthly employment report and the dollar consolidated around 1.4630 in New York before firming on Thursday after a poor German retail sales report. the EU's Almunia stated that the Euro's level would be discussed at the weekend G7 meeting, maintaining the recent tone of greater concern over the dollar's value.