Treasury - Daily Forex for day 28.03.2006

With no important economic data released yesterday, the market's attention turned to the FOMC meeting, whose outcome will be known later today. Nobody expect other result than a 25 basis point interest rate hike, which will lift the benchmark fed funds rate to 4.75%. More importantly, investors will pay close attention to Fed's statement for clues about possible further hikes beyond 4.75%. On FX front, the dollar firmed slightly against the euro yesterday, but fell to one-week lows versus the yen as Japanese investors repatriated profits before the end of Japan's fiscal year on March 31.

The Czech unit showed muted reaction to the decision of South Korea carmaker Hyundai on Monday to invest up to EUR 1bln into a new plant in the Czech Republic. The crown closed the session almost flat versus the euro.