It looks increasingly like the Fed rate hike cycle is coming to an end, and that's been the focus. ... The market is just looking for an excuse to sell the dollar.

The market continues to focus on the lack of yield in the euro-zone, keeping the euro on the defensive.

The details of the report suggest many of these drags on growth were one-off factors and that the underlying trend in 2006 remains strong.

On balance, the macro outlook continues to point to further rate hikes by the Fed.

Any upside in the greenback today may be mitigated by tomorrow's (Friday's) trade balance figures, which are the key release of the week. If they show a larger-than-expected deficit for June, dollar selling will dominate the theme in the currency markets.

ISM was overall a good report, but (investors) are staying on the sidelines until the jobs reports comes out.