Treasury - Daily Forex for day 04.08.2005

The euro firmed steeply against the dollar on Wednesday on the back of a technical breakdown of key chart levels, setting a new trading range. In addition to a two-month low against the euro, the dollar also fell to a six-week low against the Swiss franc and a three-week trough against the British pound. However, the dollar largely ignored slightly weaker-than-expected U.S. service sector report. The Institute for Supply Management's non-manufacturing index slipped to 60.5 in July from June's 62.2. By contrast, the euro zone services purchasing managers index edged up to 53.5 last month from 53.1 in June, while the region's retail sales grew a higher-than-expected 0.9% in June. Looking ahead, traders will focus on Friday's U.S. jobs report for July, which is expected to show a gain of 183,000 in non-farm payrolls.

The crown continued to march higher against the euro yesterday, climbing as high as 29.860, a six-week high.