Treasury - Daily Forex for day 03.05.2006

The dollar was still in the downtrend of the last few weeks on Tuesday, remaining close to one-year lows against the euro hit a day before as data in the euro zone pointed to continuing expansion of the region's economy. The euro was underpinned by further improvement of region's factory activity as indicated by the Purchasing Managers' Index for April which rose to its highest since September 2000. The dollar got little support from Fed Chairman Ben Bernanke's remark that the bank was still aggressive on inflation.

The Czech crown surged to two-month highs against the euro on Tuesday, helped by positive investor sentiment toward central European markets and announcement that car maker Hyundai Motor Co. confirmed its investment plan to spend up to 1 billion euros on a car factory in the Czech Republic. However, markets ignored data showing the state budget balance turned to a 20 billion crown deficit in April from an end-March surplus, but still it was the best result for the period in five years.