Treasury - Daily Forex for day 19.07.2005

U.S. economic reports released on Thursday were somewhat mixed for the dollar, causing the U.S. currency was little changed versus the euro at the end of New York session. Retail sales surged 1.7% in June, above expectations for a 1.0% rise. Excluding car segment, sales grew 0.7%, a bit above forecasts. On the contrary, the consumer price index was flat in June, coming in below a 0.3% increase predicted by the market. Lower inflation suggested the Fed might be less aggressive in tightening of interest rates, while surprisingly strong retail sales reflected strong consumer spending, thus supporting policy of steady rate increases. This afternoon, markets will concentrate on U.S. June PPI data and a July reading of the University of Michigan consumer sentiment.

The Czech crown rose modestly against the euro yesterday, rebounding from six-week lows hit in the previous session. The economic data calendar is light these days.