Treasury - Daily Forex for day 06.04.2006

The U.S. dollar continued to weaken to fresh two-month lows against the euro yesterday, knocked down by shrinking spreads of U.S. bond yields over comparable euro zone papers. The dollar only pared some losses after report showing the U.S. service sector activity index for March came in above expectations. The euro also firmed to new record highs against the yen and a 15-month high against sterling. The European Central Bank is expected to leave rates on hold this afternoon, but the bank's President Jean-Claude Trichet will highly likely suggest a possibility of policy tightening at the next meeting in May.

The crown held in a tight range versus the euro on Wednesday, closing the session almost flat at 28.53.