European focus: the dollar stays at the crossroad.[E]

The dollar advanced against the euro and yen on speculation global
economy slowdown will urge investors to choose more risk-relieved assets
denominating the dollar.
USD gains are bolstered on euro inability to take $1.27. Fed higher
rates can impact world economy cooling, materials demand drop, reduce
export profit and lure investors to sell shares.
A lot of people are looking for weak dollar but they will possibly face with
disappointment,'' said Carsten Fritsch, Commerzbank."It's a short-term
reaction only."
"There is a growing risk of a global slowdown,'' said Toru Umemoto,
Barclays Capital. "In a such situation, investors tend to buy safer assets
such as U.S. Treasuries. This is bullish for the dollar.''
The U.S. currency also benefited from few signs of raising violence at
the Middle East. Today early morning the Israeli soldiers entered into
southern Lebanon.
Gains in the dollar may be limited amid speculation reports this week
will show growth cooled in Q2 and consumer confidence slid in July.
"USD will drop", - supposes Ray Attrill, Forecast Ltd. "US economy
slowdown will boost odds Fed take a pause.". This week USD will dive to
$1.2750 versus euro and to Y115.50 against the yen. In three-monthly
prospect are expected $1.32 and Y110 according to analytic predicts.
Growth slowed in the Q2 as consumers spent less because of elevating
borrowing costs and near-record gasoline prices.
The yen losses versus the dollar as speculation reel BOJ will cut off
it's latest rates hike.