Treasury - Daily Forex for day 28.06.2006

The dollar was barely changed against major currencies on Tuesday, with market watchers focusing on a two-day Federal Reserve's policy meeting, which starts on Wednesday. The Fed is broadly expected to hike rates for the 17th consecutive time to 5.25%. Earlier in European trade, the euro firmed briefly versus the dollar and yen after Germany's Ifo institute reported its headline business climate index unexpectedly rose to 106.8 in June, beating forecasts for a drop to 105.0. Moreover, ECB governing council member Nicholas Garganas said the bank was ready to raise rates aggressively to curb the rising inflation.

The crown was locked in a tight range against the euro yesterday, with the market lacking important economic data releases. The CNB is expected to keep interest rates unchanged at its monetary meeting tomorrow but the market is awaiting accompanying comments which might offer clues about the interest rate outlook.