Treasury - Daily Forex for day 12.01.2005

The European single currency firmed versus the dollar yesterday after a German ZEW institute survey showed investor confidence in the largest euro zone economy improved more than expected in January. But later the euro lost all of its previous gains against the dollar. Elsewhere, the dollar fell against the yen after European Central Bank Chief Economist Otmar Issing suggested that Asian currencies were relatively weak versus the U.S. currency. A key figure today will be the value of U.S. trade deficit for November. Analysts expect the gap to shrink to $54.0 billion from a record $55.46 billion in October.

After matching Monday's two-year high of 30.220 per euro early on Tuesday, the crown weakened slightly in the rest of the session. There was no reaction to industrial output data for November.