Treasury - Daily Forex for day 15.03.2007

The dollar weakened against the euro on Wednesday, undermined by a deep decline in U.S. stocks on concerns about the U.S. housing market. Earlier, data showed that the U.S. current account deficit narrowed to lower-than-expected $195.7 billion in the fourth quarter, the smallest since 2005, from a revised $229.3 billion in the third quarter, providing the dollar a short-lived boost. Later in the U.S. trade, the dollar erased part of its losses after U.S. stocks recovered.

The crown extended its rally against the euro on Wednesday, benefiting from the improved sentiment towards regional currencies. Domestic economic data released yesterday were also crown-supportive, with February PPI picking up to higher-than-expected 3.2% from January's 2.8% and January's current account posting a surprisigly high surplus of 5 billion crowns.