Treasury - Daily Forex for day 02.03.2005

The dollar firmed moderately against the euro on Tuesday despite softer U.S. report on manufacturing activity in February. The Institute for Supply Management reported its main index dropped to 55.3 from 56.4 in January, below expectations for a rise to 57.0. In Europe, preliminary data on euro zone inflation showed the annual rate sped up to 2.0% in February from January's 1.9%. Economists had forecast a rise of 2.1%. A key economic data release this week will be U.S. non-farm payrolls report on Friday, which is expected to show an increase to 220,000 jobs in February from 146,000 in the previous month.

Tracking other currencies of neighbouring countries, the crown surged to fresh 2-1/2-year-peaks versus the euro yesterday. The currency rose as high as 29.585 per euro, its strongest level since September 2002 before retreating to 29.650 at the close.