Treasury - Daily Forex for day 09.11.2005

The dollar climbed to a two-year high of $1.1711 per euro yesterday before paring gains, boosted by a widening yield advantage. Whereas the market is expecting U.S. interest rate to continue rising, the ECB has given no indication on when it could raise rates from an all-time low of 2%. Moreover,the euro came under pressure due to the riots in France and political calls from euro zone finance ministers for the ECB not to raise interest rates.

The Czech crown closed Tuesday's trade little changed against the euro, with news on higher-than-expected October inflation having limited impact on the market. The monthly gain of 0.9% in the CPI was the strongest since January 2004, lifting the annual rate of inflation to a new year-to-date high of 2.6% from September's 2.2%. The market had expected a 0.6% monthly rise and a 2.3% y-o-y increase in October CPI. The October's unemployment rate came in at lower-than-expected 8.5%.