Treasury - Daily Forex for day 20.01.2005

The U.S. dollar climbed to fresh two-month highs of around $1.2966 per euro yesterday, after sliding as low as $1.3118 in early European trade. In addition to technical factors, upbeat U.S. economic data helped drive the U.S. currency higher. Headline CPI for December dipped 0.1% on the back of cheaper energy prices, but excluding food and energy, prices rose 0.2%, in line with expectations. The data confirmed a trend of steady advance in inflation, supporting market expectations of further interest rate tightening in the U.S. A weekly U.S. jobless report showed that initial jobless claims declined more than expected, to 319,000 in the week ended Jan 15.

The crown jumped to near two-year peaks against the euro in early trade on Wednesday, to 30.230 from 30.380 per euro at the open. Then the currency stabilized at 30.280, the level close to which it stayed for the rest of the session. No important economic figures are scheduled to be released in the next days.