Morning Forex Update : Dollar

Fridays GDP and PCE will still have lingering effects on the markets today. The surprise real GPD figure which rose to a softer then expected 2.5% (Q2) and upwardly revised core PCE data might have been just what the FED ordered.
Bernanke had anticipated an increase in inflation but was hoping for softer growth, which he got, in order to support a monetary policy which allows for a pause in August.
Recent testimony for the FED Chairman has implied that a favored course of action would be hold rate and allow slowing growth to lessen inflation.
While these numbers heighten the probability of a pause at the next FOMC meeting we still believe a .25%bp will transpire.
Trader will be watching for any additional signals that growth is soft such as this weeks July ISM.