Treasury - Daily Forex for day 03.01.2005

Profit-taking and position squaring in the last trading day of 2004 led to a slight appreciation of the dollar against the euro, but the ailing U.S. currency ended the year at a nine-year low against a basket of major currencies. Against the euro itself, the dollar lost nearly eight percent in 2004. A deepening U.S. current account deficit, which is now running at 5.6% of gross domestic product, seems to have been the main reason for the dollar's decline.

In the last day of 2004, the crown edged higher against the euro, ending the year at 30.40, around six percent stronger. Last year's firming can be attributed to improving export performance, rising FDI, slightly higher interest rates and investors' optimism after EU entry in May.