The single currency rallied to a fresh record high of 1.5305 due to active cross buying in euro after the release of weak U.S. economic data together with the rally in commodity prices although price fell initially in European session to 1.5145 versus the dollar on speculation European Central Bank President Jean-Claude Trichet will signal the euro is too strong after a policy meeting on Thursday,

Euro rose strongly versus the Japanese yen from 157.01 to 159.22 as crude oil price jumped to a record $104.56 a barrel after the Organization of Petroleum Exporting Countries gave no indication it will increase production. Gold and silver also rallied to record highs of 991.10 and 20.84 respectively.

The ISM non-manufacturing index, covering almost 90 percent of the economy, improved to 49.3 last month (forecast was 47.0), from a record low of 44.6 in February, however, the index was below 50 (means contraction) for second straight month for the first time since Jan 2002. The ADP Employer Services showed businesses lost 23,000 workers in February, much weaker than the expectation of an increase of 20,000 jobs after a gain of 119,000 in January.

The greenback rose from 103.29 to 104.20 on active cross selling in the Japanese yen respectively versus the euro and sterling together with the initial rally in U.S. stocks, however, it trimmed gain after Ambac Financial Group Inc. said it will sell common stock and equity to bolster its capital. The bond insurer is seeking to stave off a downgrade of its AAA rating, the loss of which would cast doubt on $556 billion of municipal and asset-backed securities insured by the company, forcing some investors to sell the debt.

The Fed’s Beige Book survey showed that growth has slowed in eight of 12 U.S. regions since the start of the year, hurt by faltering retail sales and manufacturing and a continued decline in housing. The British pound fell initially on speculation the Bank of England will lower interest rates again on Thursday from 5.25% to 5.00% although most of the economists were forecast to keep rates unchanged at 5.25%. Australian dollar and New Zealand dollar rallied against U.S. currency from 0.9229 to 0.9359 and from 0.7924 to 0.8038 respectively on the rally in commodity prices.

Thursday will see the release of Japan’s leading indicators, German factory orders, U.S. jobless claims and pending home sales. The ECB is expected to keep its main rate at an almost-six-year high of 4.00%.