Dollar May Extend Fall Versus the Euro on Rate Differential

The dollar may fall versus the euro
for a 2nd twenty-four hours on outlooks the European Central Depository Financial Institution will
hold involvement rates unchanged today while the Federal Soldier Modesty is
forecast to cut adoption costs later this month.

Growth in Germany, the Euro region's greatest economy, is
forecast to outpace enlargement in the U.S. this year, according to
the Organization for Economic Cooperation and Development. The
difference in outputs between two-year U.S. Treasury short letters and
comparable German securities was the most unfavourable for the
U.S. since 2004. The Depository Financial Institution of England is also calculate to leave
its benchmark involvement charge per unit unchanged today.

''The ECB and the BOE will both maintain rates on clasp to wait
and see what will go on with the recognition markets,'' said Dustin
Reid, a senior currency strategian at ABN Amro Depository Financial Institution Nevada in
Chicago. ''The implicit in basics in the euro-zone still
call for a charge per unit addition by the ECB while the Federal Soldier Reserve
will cut 25 footing points this month. That's dollar negative.''

The dollar drop 0.3 percentage yesterday to $1.3646 versus the
euro and 0.3 percentage to $2.0196 per pound, at 6 a.m. inch Tokyo. The hankering rose 0.9 percentage to 115.25 against the dollar.

Thomas Reid prognoses the dollar will fall to $1.40 per Euro by
November.

For the first clip since 2004 there was no difference
between the outputs of two-year U.S. Treasuries and comparable-
maturity German bunds while shorter-term lending rates touched
multiyear highs as Banks became more than loath to lend. The yield
advantage of U.S. short letters declined as much as 7 footing points, or
0.07 per centum point, yesterday.

A private study showed yesterday the figure of Americans
signing contracts to purchase previously owned places drop in July by
the most since records began in 2001, extending a U.S. housing
slump that is weighing on recognition marketplaces and the economy.

'A Big Slide'

''The Numbers demo that it's not just a fiscal crisis
anymore, but that it's spilling into the existent economic system in a very
material manner,'' said Alan Ruskin, caput of international
currency scheme at rubidiums Greenwich Capital Markets in Greenwich,
Connecticut. ''We're in for a large microscope slide in the lodging marketplace in
the calendar months to come.''

Interest-rate hereafters demo a 72 percentage opportunity the Federal will
lower its 5.25 percentage mark charge per unit for nightlong loans between
banks to 4.75 percentage at its Sept. Eighteen meeting, up from 54 percent
yesterday. The likelihood of a decrease to 5 percentage are 28 percent.

The ECB have raised its benchmark charge per unit eight modern times from 2
percent to 4 percentage since November 2005. The BOE boosted
borrowing costs five modern times to 5.75 percentage since August last
year.

'European Currencies'

''We are seeing the U.S. economic system being the most affected by
the recognition and lodging slowdown,'' said Alan Kabbani, senior
currency bargainer at Wachovia Corp. inch Charlotte, North Carolina. ''That's refueling a displacement away from the dollar into European
currencies.''

The Organization for Economic Cooperation and Development
yesterday lowered its prognosis for growing in the U.S. this year
to 1.9 percentage from an estimation of 2.1 percentage in May. The
estimate for Federal Republic Of Germany was cut to 2.6 percentage from 2.9 percent.

The recent disturbance in recognition and mortgage marketplaces ''is far
from over'' and may decrease economical growth, said Henry Martin Robert Steel,
the U.S. Treasury Department's top domestic finance official.

To reach the newsman on this story:
Bo Nielsen in New House Of York at