Treasury - Daily Forex for day 09.07.2006

The U.S. dollar fell to a one-month low against the euro on Monday after softer-than-expected U.S. economic reports boosted speculations that the Federal Reserve could pause its interest rate tightening cycle in August. The Institute for Supply Management showed that U.S. manufacturing activity in June rose at the slowest pace in 10 months, while the corresponding manufacturing index in the euro zone reached its best reading in six years. The report helped the euro jump to a new recrod high versus the yen. Adding to the bearish sentiment toward the dollar, U.S. construction spending in May dropped 0.4%, while analysts had foreast an increase of 0.2%.

The Czech crown firmed against the euro yesterday, tracking the firmer tone in other central European currency markets as investors again started selling the dollar globally and looked for other investment opportunities.