Treasury - Daily Forex for day 19.10.2006

The U.S. dollar got rid of earlier gains against the euro in late trade on Wednesday after a slate of U.S. economic data was not entirely dollar bullish. Housing market data showed that new building permits slumped to near a five-year low, overshadowing a 5.9% rise in September's new housing starts. Core CPI, excluding food and energy prices, came in line with expectations, up 0.2% in September, while a sharp fall in energy prices pulled the headline inflation down by an unexpectedly strong 0.5%.

The crown rebounded from a fresh two-week low versus the euro yesterday helped by improved investor sentiment toward the whole central European region. Better-than-expected retail sales data had little impact on the trade. The sales were up 6.8% yoy in August, above forecasts of a 5.8% yoy increase.