Treasury - Daily Forex for day 22.10.2007

The dollar slipped to a fresh record low against a basket of currencies on Friday after a statement from the G7 meeting in Washington failed to mention the U.S. currency and its weakness. The Group of Seven nations thus gave a signal to markets that the dollar's troubles should not threaten global stability, decreasing likelihood of a coordinated intervention in support of the U.S. currency. On the contrary, the statement called China for allowing a faster appreciation of its yuan. As result, the yen, a proxy for the Chinese currency, firmed to three-week peaks both against the dolar and euro.

The Czech currency hit an all-time high against the euro for the second consecutive day on Friday as stop-loss orders were executed following the breach of key resistance level. Unlike the previous sessions, neighbouring currencies within the central European region were taking the opposite direction on Friday, posting moderate losses versus the European single currency. Against the dollar, the crown also touched a new record peak, breaching the 19.0 CZK/$ level. The crown's sharp appreciation in the past days substantially reduced chances that the CNB would hike interest rates already this month.