The Dollar lifted against Euro and Yen overnight after the ECB watered down expectations of further rate hikes. The Dollar weakened versus the commodity –currencies which rose against the greenback in response to firmer metals prices. US data was supportive for the dollar, with manufacturing ISM steady at firm levels and jobless claims better than expected. The PCE deflator was lower than expected as it rose by just 0.1% in October. The US ISM manufacturing index eased from 59.1 to 58.1 in November. This was close to the market expectation of 58.0. Overall then it was the familiar theme of strong data and benign inflation that has helped the dollar most of the year. In the US today, US non-farm payrolls are expected to resume their pre-hurricane trend in November. A strong monthly increase of 215,000 is expected.

The Euro traded in a narrow range in London as the market waited for the ECB rate announcement. As expected the ECB raised rates by 25 basis points and the Euro actually fell. The Euro traded to a low of 1.1692 from a high of 1.1802. The reason for the fall was when ECB President Trichet said during his press conference that there was no plan for further tightening. Data released yesterday prior to the ECB announcement supported rate expectations, with the Euro area manufacturing PMI improving fractionally to 52.8 from 52.7.
my technical commentary,The Euro has slipped back into the range following Monday's surge which fizzled ahead of the cluster of resistance around 1.1903 to 1.1915 and ahead of the 12-week trendline resistance that is today located at 1.1924. A break of the trendline would signal a potential medium term base. The underlying trend remains bearish with key support levels located at 1.1683, Nov 28 low and the more important 1.1644 low, Nov 15 which also marks the 2005 low thus far.Have a nice trading day bro.