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Dollar slips, bonds lower
Supportive comments from President Bush fail to give U.S. currency a boost; bonds slip on ISM data.
June 2, 2003: 4:06 PM EDT

NEW YORK (CNN/Money) - The dollar stalled Monday despite comments President Bush made at a G8 meeting that seemed to support a strong dollar, counteracting recent weak dollar comments from other members of his cabinet.

Speaking at the Group of 8 (G8) meeting in Evian, France, President Bush reportedly told world leaders that he wanted a stronger dollar, but acknowledged the possibility of currency fluctuations.

As of 3:45 p.m. ET, the euro bought $1.1757, up from $1.1726 late Sunday. The dollar bought ・118.61, down from ・119.62 late Sunday.

The dollar has tumbled recently to new multimonth and even multiyear lows versus other major currencies, as international investors have opted out of the U.S. currency in favor of other, higher-yielding currencies, in particular the euro.

Recent comments from people such as Treasury Secretary John Snow seemed to imply that the Bush administration supported a weaker dollar as a means of boosting exports. So the perception of more positive comments Monday supported the greenback.

"Helped by supportive comments by U.S. President Bush and weak euro-zone data, the U.S. dollar is trading broadly higher against the major European currencies," Clyde Wardle, a U.S. currency strategist at HSBC Securities, wrote in a morning note to clients.

The Treasury market turned lower Monday after an improvement in industrial conditions during May surprised bond investors expecting further manufacturing gloom.

At around 3:45 p.m. ET, the 10-year note fell 1/4 of a point in price to 101-23/32, bringing the yield to 3.42 percent versus 3.36 percent late afternoon Friday. The 30-year bond fell 26/32 of a point in price to 115 even, pushing the yield up to 4.43 percent from 4.37 percent late Friday afternoon.

The five-year note fell 1/32 of a point in price to 101-6/32, with the yield at 1.59 percent, while the two-year note rose 1/32 of a point to 99-27/32, pushing the yield to 1.33 percent.

Manufacturing activity shrank for a third straight month in May, the nation's purchasing managers said Monday, but it was stronger than economists expected, raising Wall Street hopes for a broader economic recovery.

The Institute for Supply Management (ISM) said its index of manufacturing activity rose to 49.4 from 45.4 in April. Any number below 50 indicates contraction in the sector. Economists, on average, expected the ISM index to rise to 47.6, according to a Reuters poll.

The ISM's specks of promise for the economy prompted some speculation that the Fed may not need to cut interest rates at its next policy meeting on June 24-25, though some observers argued Friday's payrolls report would be the clincher.

"There seems to be a little less chance the Fed will ease after this number, but the payrolls data on Friday will still be the trump card," said Cary Leahey, senior U.S. economist at Deutsche Bank Securities.

Analysts on average look for payrolls to fall 39,000 in May after April's 48,000 drop, while the jobless rate is seen rising to 6.1 percent from 6.0 percent.  Top of page




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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: テつゥ 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices テつゥ S&P Dow Jones Indices LLC 2018 and/or its affiliates.