Treasury - Daily Forex for day 12.05.2006

The U.S. dollar slid to a new one-year low against the euro yesterday, undermined by market expectations that the Fed will soon pause in raising interest rates after the 16th consecutive hike on Wednesday. Putting an additional pressure on the dollar, U.S. retail sales rose less-than-expected in April. Markets are now looking ahead to March U.S. trade data to be released this afternoon. The trade deficit is expected to inflate to $67 billion from $65.7 in February.

The Czech crown rose to a new record high of 28.145 to the euro on Thursday after breaking through the psychological 28.20 barrier. The move seems reflecting investors' shift from the dollar to other currencies including those of central European countries.