Treasury - Daily Forex for day 12.07.2006

The dollar slipped against the euro yesterday as investors adjusted positions ahead of closely-watched U.S. foreign trade data due out this afternoon. The Commerce Department is expected to announce that the trade deficit widened to $64.9 billion in May, the widest gap in four months, from April's $63.4 billion. Against the Japanese yen, the dollar was undermined by speculations that Japan will soon raise interest rates for the first time in six years.

The Czech currency shed earlier gains against the euro on Tuesday to close the trade flat at 28.45 to the euro. The crown ignored the central bank's minutes from its June policy meeting, which pointed to the shift to tightening bias.

This morning, the crown ignored reports showing June CPI was up 0.3% mom, in line with market expectations, and the unemployment rate fell unexpectedly to 7.7% in June from 7.9% in May.