Treasury - Daily Forex for day 16.06.2005

The U.S. dollar retreated from multi-month highs against other major currencies on Wednesday after U.S. capital flows data lagged well behind expectations. Net capital inflows totalled $47.4 billion in April, which was not enough to cover the trade deficit worth of $57 billion for that month. The market had forecast net inflows of $60.0 billion. Adding to the dollar's slide, U.S. consumer prices report came in softer-than-expected, throwing doubts on further interest rate tightening by the Fed. The headline CPI dipped 0.1% in May, the first drop in 10 months, while the market had predicted a flat reading after the April's 0.5% increase. Ex-food and energy price index rose 0.1% last month, less than a 0.2% increase expected by the market. Finally, U.S. industrial production rose by higher-than-expected 0.4% in May, recovering from a 0.3% decline in April.

The crown closed Wednesday's trade a touch weaker against the euro, at around 30.0 after hitting an intraday high of 29.885. The late retreat was attributed to the single currency's firming against the dollar.