Treasury - Daily Forex for day 17.01.2006

The dollar firmed against the euro and the yen on Monday in technically-driven trade influenced by holiday in the United States for Martin Luther King day. However, the sentiment towards the dollar remains negative, with Federal Reserve signalling that the bank may be near the end of its tightening cycle and U.S. economic data coming in rather soft. By contrast, relatively postive euro zone data underscored speculations that the ECB will continue to hike interest rates.

The crown was barely changed yesterday, hovering near the 28.800 per euro level. But Czech money market rates and debt yields fell after comments by Vice-Governor Miroslav Singer who suggested that interest rates could be cut in the wake of a strong crown.