Optimism for a dollar rebound that pervaded the currency market at the start of the year is fading.

Futures traders doubled bets against the greenback in the past two months, data from the Commodity Futures Trading Commission in Washington show. Citigroup Inc., Deutsche Bank AG and Royal Bank of Scotland Group Plc, which handle almost 40 percent of global foreign exchange trading, say the currency may slump to $1.65 per euro by October, from $1.5672 today.

While the dollar rose April 1 when UBS AG and Lehman Brothers Holdings Inc. said they're raising $19 billion to shore up their capital, it retreated for the rest of the week after Federal Reserve Chairman Ben S. Bernanke acknowledged for the first time that a recession is possible. Officials of the Group of Seven nations meet this week in Washington, and are unlikely to agree on a plan to boost the currency because rising exports may be the only blessing of a weak currency in a weakening economy.

The US economy lost 80k jobs in March, compared to the IFR Markets consensus of
-50k and IFR's own estimate of -15k. BLS revised February jobs lower to a loss
of 76k versus 63k previously reported. They found more job losses in January
too, making the first quarter average growth of -78k, the worst in five years.
The Dollar Index, which measures the currency against six of its main counterparts, tumbled the past two months after trading little changed between October and mid-February. It's down 5.8 percent in 2008, after dropping 8.3 percent in each of the past two years.

The G-7 -- the U.S., Japan, Germany, the U.K., France, Italy and Canada -- hasn't intervened in currency markets since supporting the euro in 2000. They are unlikely to buy or sell currencies to prop up the dollar after meeting April 11, according to Deutsche Bank, Citigroup and Bank of America Corp. in Charlotte, North Carolina.

TECHNICAL OUTLOOK – DAILY CHARTS

EUR/USD

Resistance: 1.5902 -all time high

Support: 1.5510

Sentiment: mildly bullish

GBP/USD

Resistance: 2.0190

Support: 1.9640

Sentiment: mildly bearish

AUD/USD

Resistance: 0.9200/0.9300

Support: 0.8885

Sentiment: mildly bullish

USD/JPY

Resistance: 103.65

Support: 98.80

Sentiment: mildly bullish

USD/CAD

Resistance: 1.0245

Support: 0.9865

Sentiment: mixed

USD/CHF

Resistance: 1.0355

Support: 0.9875

Sentiment: mixed

GPB/JPY

Resistance: 205.70

Support: 196.90

Sentiment: mildly bearish