The market is sensitive to structural factors at the moment and the current account deficit will be a negative in the medium-term for the dollar.

We don't think they will intervene -- there are various policy responses possible and there could be interest rate cuts. All our short-term indicators show that euro/dollar is overbought,

Investors are reluctant to take the dollar significantly higher and we are having thin markets. The market still prefers to sell the dollar on rallies.

The hurricane has been upgraded to a four, similar to Katrina, so that is preying on people's minds particularly if it hits areas with some key strategic oil facilities,

From a yield perspective, the pound is looking attractive as the trend appears to be to buy yield. For now, the pound is likely to remain strong on uncertainty over the outlook for U.S. rates.

Technically a lot of damage has been done to the dollar but yesterday's failure to break through new levels has helped the dollar,