Treasury - Daily Forex for day 21.06.2005

The dollar appreciated against the euro on Monday after a Reuters report suggested that the ECB was considering an interest rate cut. This has opened the way for more euro weakness after European Union leaders failed to reach agreement on a 2007-13 budget last week. By contrast, Federal Reserve's representatives reiterated yesterday that the Fed is unlikely to stop monetary policy tightening in the near term. This would widen rate differentials in the dollar's favour even more. The only U.S. economic report on Monday showed that leading indicators dropped 0.5% in May to 114.1. The market had predicted a 0.3% decline.

The Czech currency slid to the weaker side of the 30.0 per euro level early on Monday, following a weaker trend in the region. Later in the session, the crown erased some losses to end the day at around 30.0.