Treasury - Daily Forex for day 09.10.2006

The dollar extended its gains on Friday, firming to a 10-week high versus the euro and a seven-month peak against the yen, underpinned by upward revisions to U.S. job growth data and by a report that Japan's neighbour country North Korea may soon test a nuclear weapon. U.S. Labour Department reported it had sharply undercounted job growth in the year ended March and also significantly raised non-farm payrolls for August. These reports proved to overbalance the less-than-expected 51,000 gain in payrolls in September. The market forecast the economy had created around 125,000 jobs for the month.

The crown retreated from six-week highs against the euro on Friday, resisting the continued appreciation of other central European currencies. This morning, the economic data showed the monthly inflation fell 0.7% in September, knocking down the yoy rate to 2.7% from August's 3.1%. The market had expected the CPI at -0.5% mom and 2.9% yoy. A separate report showed the unemployment rate dipped to 7.8% in September from 7.9% in August, as expected.