Treasury - Daily Forex for day 13.04.2005

The dollar surged against its key rivals on Tuesday although a closely-watched report on U.S. foreign trade showed a record deficit for February. It seemed that the market had already priced in such a huge gap. The Commerce Department reported the trade deficit reached $61 billion after an upwardly revised gap of $58.5 billion in January. Economists had forecast a $59 billion shortfall in February. Later in the U.S. session, the dollar shed some gains after minutes of the Federal Reserve's last meeting failed to confirm market expectations of a quicker pace of interest rate tightening. However, the Fed reported it was still concerned of building price pressures.

The crown strengthened to an April high against the euro early on Tuesday, taking little notice of CNB's minutes from its March 31 meeting. The minutes showed the policy board voted unanimously for a quarter percentage point interest rate reduction, indicating that a further rate cut could yet be delivered. Later in the day the crown lost its previous gains to close a bit weaker against the euro.