The dollar continued to falter as soaring oil prices and the devastation wreaked by Hurricane Katrina threatened to cripple growth and bring about an early end to the interest rate hiking cycle in the US. The euro, pound and Swiss franc were all at three-month highs against the hapless dollar. "The issue is not with the direct impact but the knock-on impact of the loss of oil refinery capacity some 10 pct of US refining capacity has been knocked out for an uncertain period," Steve Pearson, chief currency strategist at HBOS said. Oil prices -- both benchmark crude in New York and London -- stayed within spitting distance of 70 usd barrel, as chaos reigned in the oil refining coast of the US. And, with the latest economic indicators already turning sour, the gloomy growth prospects in the US have been driven home repeatedly. "Soft data - especially recent purchasing managers surveys - have encouraged the view of an imminent about turn in the cyclical outlook," said Pearson. Fixed income markets have been busy scaling back US rate hike expectations. Going by the Fed funds futures rate, there is only a 70 pct chance of a quarter point rate hike in the US when the Fed makes its decision on September 20. Players are also starting to bet that US rates will go no higher than 3.75 pct, previously hikes up to 4.00 pct or 4.25 pct were expected. These wider concerns aside, the dollar also faces other tests today -- in the form of key US labour market numbers. Non-farm payrolls are predicted to rise by just under 200,000 in August "If - as we suspect - payroll growth comes in somewhere around 200,000 then this will probably not be enough to either challenge or intensify the growth bearish atmosphere," said Pearson. But if payrolls beat predictions, rising by anywhere close to 300,000, rate hike expectations will be reawakened, dragging the dollar sharply higher, he added