Treasury - Daily Forex for day 31.05.2005

The European single currency slumped to seven-month lows versus the dollar on Monday after French voters said "No" to the EU constitution in Sunday's referendum. The "No" vote garnered higher-than-expected 55%. France's rejection of the document raised political uncertainty in the eurozone and brought more doubts to future integration. Moreover, the euro could come under renewed pressure on Wednesday when Dutch voters are also expected to reject the constitution.

With London and New York traders absent due to a holiday, the crown closed little changed against the euro on Monday. The news on the rejection of the EU constitution in France had little immediate impact on the market. The crown fell moderately at the open but regained ground later in the yesterday's session. This morning the market shrugged off a report showing nominal wage growth slowed to 5.8% in the first quarter from 6.3% in the final quarter of 2004.