Further rise in oil prices kept dollar slightly lower despite brief gains following a US ISM manufacturing report that beat expectations. Analysts say detail of ISM report not as strong as headline number suggested. "Much of (the rise in the ISM) is due to the building of inventories," said Michael Woolfolk, senior FX strategist at Bank of New York Mellon; "Even though it looks positive on the surface, it is quite a negative report." Plus, another report showing 0.4% decline in U.S. construction spending in May kept dollar-bulls wary; euro gains were also fueled by anticipated hike by ECB tomorrow, plus expectations of more hawkish remarks on inflation.Late in New York, EUR/USD 1.5785 vs 1.5744 late Monday, USD/JPY 106.10 vs 106.16, GBP/USD 1.9938 vs 1.9917, USD/CHF 1.0201 vs 1.0215, EUR/JPY 167.42 vs 167.18. Stocks rose modestly as General Motors rallied 2% after June sales, which was very weak, managed to beat expectations; financial stocks also recovered somewhat, with American Express +6.2% after UBS raised its rating on credit-card issuer to neutral from sell; Dow +0.3%, Nasdaq +0.5%, Philly semicons off 0.6%. Treasurys mostly lower as buying fizzled out on moderating stock losses; 2-year yield +0.6 bp at 2.63%, 10-year +0.9 bp at 3.99%. Nymex August crude rose 97 cents to fresh record high of $140.97/bbl on dour supply forecast from IEA, renewed tensions in the Middle East. Comex August gold rose $16.20 to $944.50/oz on fund-buying with stronger oil aiding.
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