DISAPPOINTING news about the United States economy sparked a dollar sell-off last week, which saw the currency marked sharply lower against the deutschemark, yen and sterling.
The currency started to drift downwards early in the week after the release of the consumer confidence index which dropped six points in last month.
Jobless claims which unexpectedly jumped by 33,000 for the last week of March, send the unit tumbling to a new record low against the yen and six week low of less than 1.60 Deutschemarks on Thursday.
On Friday the tone was bearish as the market anxiously awaited the release of the key employment report for the full month.
Although the unemployment rate remained unchanged at seven per cent, a fall in non-farm payrolls was enough to convince traders that the US economy was losing momentum.
Will the recent dollar sell-off continue? in the short-term it looks likely. Dollar bulls are beginning to run out of patience again, echoes of spring 1992 when the market turned against the currency and switched into the higher yielding European currencies.
But global economics have changed since then.