Treasury - Daily Forex for day 23.06.2005

The U.S. currency strengthened against the euro on Wednesday in the wake of heightened speculation that European interest rates might go lower. Minutes of the Bank of England's June policy meeting revealed that two policy committee members voted for a 25 basis point rate reduction, fueling expectations the ECB could cut at some point. But several ECB policy makers have reiterated that current interest rate levels are appropriate and that rates in other European countries will not influence the ECB. By contrast, the U.S. Federal Reserve is broadly expected to raise rates next week.

The crown climbed to three-month peaks against the broadly weaker euro in late Prague's trading yesterday, getting a boost from positive mood in the central European region. This morning the currency extended its gains to trade near 29.7.