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US Economy Sluggish - Inflation UP!

Supply Management survey's indication of accelerating inflation sparked a rapid reversal in the dollar's fortunes, switching the market's attention to inflation and away from economic and jobs weakness, according to Brian Dolan, head of currency research at Gain Capital.
The March ISM factory index slipped to 55.2% from 55.3% in February. The consensus forecast of estimates collected by MarketWatch was for the index to slip to 55%.
However, currency markets were more taken with the prices-paid component, which shot up to 73% from 65.5% in March, according to Dolan.
Remarks from Chicago Federal Reserve President Michael Moskow reinforced currency traders' impression that the Federal Reserve has grown more concerned about the pace of inflation, according to Dolan. During the afternoon Boston Federal Reserve Chief Cathy Minehan said recent events, including the rise in crude futures prices, have modestly raised the risk of higher inflation.
Only 110,000 jobs were added in March, less than half of the forecast for a 221,000 increase set by economists surveyed by MarketWatch.

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