Treasury - Daily Forex for day 16.04.2007

The dollar weakened to fresh two-year lows against the euro on Friday undermined by concerns about the U.S. economic outlook and volatility caused by a meeting of the Group of Seven richest nations. A weaker-than-expected U.S. consumer sentiment report prepared by the University of Michigan and tame U.S. producer price data supported speculation that the Federal Reserve might ease monetary policy this year. But a separate report showing the U.S. trade deficit surprisingly narrowed in February briefly tempered the move. The euro later extended gains versus the dollar after Yves Mersch, an ECB governing council member, said the euro zone can withstand a hard lending in the U.S. economy.

The Czech crown was flat against the euro on Friday, taking little notice of a lower-than-expected 4 billion crown surplus in February current account.