UPDATES ON AUG 11 2008

AUG 11 MONDAY

Dollar Gain Signals Pain as Rally Prompts Exit From Bull Trade .

The dollar posted its biggest gain against the Euro in almost eight years .

But still the U.S currency would be palgued by the nation's slowing

economy, widening budget and trade deficits and negative

inflation-adjusted interest rates.

The dollar strengthened to $1.5005 to the euro last week from

$1.5564 on Aug. 1, the biggest weekly increase on a percentage

basis since January 2005. It surged 2.08 percent on Aug. 8,

touching $1.4998, the most since Sept. 6, 2000, and the

second largest rally since the euro was introduced in 1999.

The number of U.S. home foreclosure filings more than doubled

in the second quarter from a year earlier, according to RealtyTrac

Inc., a seller of default data. Government reports this week may

show retail sales fell 0.1 percent in July, the first decrease since

February, and the U.S. trade deficit widened in June to $62

billion from $59.8 billion.

Dollar bears point to the Fed's decision on Aug. 5 to leave its

target rate for overnight loans between banks at 2 percent for

a second straight policy meeting. Policy makers said

``downside risks'' to growth remain, while inflation is a

``significant concern.''

Futures on the Chicago Board of Trade show a 40 percent chance

the Fed will raise its target rate at least a quarter- percentage

point by year-end and a 90 percent probability of higher

borrowing costs by the end of March.

The 14-day relative strength index fell to 22.31, the lowest since

the euro's debut. A relative strength index level below 30 suggests

a currency's decline is extreme and a reversal may be imminent.