Treasury - Daily Forex for day 25.12.2005

The dollar fell against the euro and yen on Thursday, pulled down by lower-than-expected U.S. inflation gauge watched closely by the Federal Reserve coupled by a low liquidity on the market. The core November PCE price index was up 0.1%, below analysts' forecasts of a 0.2% rise, which was seen as a sign the Fed is closer than before to ending its rate-rise cycle.

The crown broke through its previous record high of 28.84 to the euro on Thursday, climbing to a new peak of 28.80 on the back of thin liquidity before the holiday season. The CNB held its last policy meeting of this year yesterday and, as expected, left interest rates unchanged for the second consecutive month.