Treasury - Daily Forex for day 29.11.2006

The dollar continued to fall to 20-month lows against the euro, briefly slipping below $1.32 per euro mark late on Tuesday as softer-than-expected U.S. data boosted speculations that the Federal Reserve might cut interest rates in the first quarter of next year. October durable goods orders declined by steeper-than-expected 8.3%, posting the largest drop since July 2000. Additionally, the Conference Board reported that U.S. consumer confidence index surprisingly fell to 102.9 in November from downwardly revised 105.1 in October, while analysts had forecast the index to rise to 106 from October's originally reported 105.4. Fed Chairman Ben Bernanke failed to support the dollar, saying the U.S. economy is set to grow at a moderate rate and core inflation should ease.

The crown traded in a narrow band around the 28 per euro level on Tuesday, with its intraday moves mirroring those of other central European currencies. The Czech National bank holds monetary policy meeting tomorrow, but interest rates are broadly expected to remain unchanged.