Treasury - Daily Forex for day 16.06.2004

...inflation met market expectations, up 0.2% in May, strengthening the economists' view that the Fed will more likely raise interest rates by 25 basis points rather than by 50 basis points. Later the dollar regained some ground after the University of Michigan's consumer sentiment index came in at 95.2, well above forecasts of 89.9. Treasury Department report on U.S. asset flows for April was also positive, when it came roughly within expectations. Today, market players will pay attention to U.S. data on housing starts, industrial production and the Fed's beige book.

Fears of political instability continued to weigh on the crown yesterday. The currency closed the trade at around 31.81 to the euro, weakening from 31.53 at the open. Early this morning, the crown extended its losses, but took little notice of slightly better-than-expected retail sales data. The sales rose 2.6% y-o-y in April, exceeding forecasts of a 2.3% increase.