Treasury - Daily Forex for day 29.03.2004

...in February, leading the President of the Ifo institute to call for interest rate cut by the ECB as soon as possible. In addition, Deutsche Bank revised its forecasts on European rates, predicting a 25bp cut within the next three ECB policy meetings. Further boosting the dollar against the euro, the University of Michigan's consumer sentiment index for March rose faster-than-expected, to 95.8 from 94.4 in February. Nevertheless, the dollar fell to a five-week low against the yen as the Japanese currency capitalised on strong Japanese household spending and retail sales data. Among events on this week's calendar, Thursday's ECB meeting and Friday's U.S. jobs report seem to be the most important.

The crown weakened versus the euro on Friday, slipping further from a 3-week peak hit earlier last week. However, the market looks bullish on the crown given the favourable trade and economic growth prospects and speculations about the ECB's rate cut.