The dollar slumped across the board after a report showed the nation's manufacturing activity slowed to its lowest level since April 2003, raising expectations for more interest rate cuts from the Federal Reserve this year.

US manufacturing ISM index unexpectedly dropped from 50.8 to 47.7 in December, adding to concern that the broad economy may cool down following subprime meltdown. However, the ISM price index increased from 67.5 to 68, suggesting inflation pressures remain.

Interest rate futures showed traders have fully priced in a quarter-percentage point to 4.00% by the Fed at its January 30 policy meeting.

Besides, surging oil prices sent the greenback down further. Crude oil hit 100 dollars per barrel today on demand concern. On the other hand, the yen gained against high-yielding currencies as investors cut back carry trades when oil prices rise.

The dollar slid from 111.50 to approach the 109 level versus the yen, and weakened from around 1.4650 to 1.4750 against the euro.

Thursday will see US weekly jobless claims, ADP private sector employment report, and November factory orders. ADP employment report is expected to show 50k jobs were added in December, versus a robust 189k reading in the previous month.

EURUSD will face interim resistance at 1.4730, followed by 1.4750 and 1.4780. Additional ceilings will emerge at 1.48, backed by 1.4850. Support starts at 1.47, backed by 1.4670, 1.4650 and 1.46. Subsequent floors are eyed at 1.4550.

GBPUSD encounters interim resistance at 1.9830, backed by 1.9850 and 1.99. Subsequent ceilings will emerge at 1.9920, followed by 1.9950 and 1.9980. On the downside, support begins at 1.98, followed by 1.9780 and 1.9750. Additional floors are eyed at 1.9730, backed by 1.97 and 1.9650.

USDJPY encounters interim resistance at 109.70, backed by 110 and 110.50. Subsequent ceilings will emerge at 110.80, followed by 111 and 111.50. On the downside, support begins at 109.25 and 109, followed by 108.70. Additional floors are eyed at 108.50, backed by 108.30 and 108.