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The dollar fell after a weaker-than-expected manufacturing report fed expectations that the economy will slow more than Europe's.
The sluggish economy has fed expectations that the Federal Reserve could try to lower borrowing costs by announcing a bond buying program as soon as Thursday.
The report fed expectations among some economists that yet another aggressive half-point cut in interest rates might be in store when Fed policy makers meet on June 26 and 27 rather than the slimmer quarter-point reduction the markets are now anticipating.
But if the pope's words have fed expectations of a "High Noon -style showdowNoon -style likely to be dashowdown
As a catalyst for change in this city of nearly 200,000 (the fourth-largest in the state), the neighborhood has fed expectations among officials like Mayor Philip A. Amicone, who knows all too well its history of repeated revitalization attempts.
That chutzpah, and the prospect of new government infrastructure spending to stoke the countrys slowing economy, have fed expectations of even more gains in its shares.
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The yield on the Treasury's two-year note, which is a good indicator of investor expectations for Fed rate cuts, rose to 4.42percentt from 4.33percentt and is implying a fed funds rate closer to 4.25percentt.
The 10-year note was yielding 3.48%, down from 3.56% Friday, and fed funds futures were indicating expectations for aggressive easing of the Federal Reserve's monetary policy.
Louis Crandall, the chief economist at Wrightson ICAP, said this change in the fed funds futures contracts reflects both a revised expectation about the actual Fed action and a diminished risk in that bet.
"I wouldn't bet against Treasuries in the short term," said Robert Justich, managing director for fixed income at Times Square Asset Management, citing expectations for lower rates and Fed-led optimism that inflation will remain contained.
However, the suggestion that breast-feeding is protective of PCB-induced alterations of thyroid function is not concordant with the higher levels of PCBs in breast-fed adolescents and the expectation of a dose response relationship.
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