Treasury - Daily Forex for day 18.10.2007

The U.S. dollar weakened against its key rivals on Wednesday, undermined by a soft report on U.S. housing sector and a record high oil prices. The Commerce Department reported that U.S. housing starts fell 10.2% in September to its lowest level in 14 years, while the separate report on building permits showed the similar weakeness. On the other hand, the market shrugged off data showing the fastest rise in U.S. headline inflation in four months in September. Whereas the headline figure slightly overshot market expectations, the core index, which excludes food and energy prices, rose in line with forecasts. Traders also showed little reaction to the Federal Reserve's Beige book report, which showed that the dynamics of the U.S. economic expansion has decelerated since August.

Tracking other central European currencies, the crown surged to near its recent record peak versus the euro yesterday.