Treasury - Daily Forex for day 27.01.2006

Better-than-expected U.S. economic data and a shift in market positioning helped the dollar extend its gains versus other major currencies yesterday. U.S. durable goods orders increased by 1.3% in December, exceeding market forecasts for a 1.0% rise. Furthermore, weekly initial U.S. jobless claims came in at 283,000, below expectations for 305,000 reading.

The CNB left interest rates unchanged at 2% yesterday, but revealed that board members discussed possible lowering of interest rates. Vice-Governor Ludek Niedermayer then warned that the bank could again consider, or even deliver, a rate cut next month if the crown remains strong or firms further. Consequently, the crown weakened against the euro.