Treasury - Daily Forex for day 31.05.2006

The U.S. dollar failed to benefit from news that President George W. Bush nominated Goldman Sachs Chairman Henry Paulson for Treasury Secretary and instead continued to fall sharply against major currencies on bearish economic data. Henry Paulson, a successor to John Snow, is seen as an advocate of strong dollar policy, thus no significant change to current policy stance is expected. The dollar came under increased pressure after U.S. Conference Board reported its index of consumer confidence fell in May to three-month low. The index slumped to 103.2 from April's 109.8, but the market had forecast a steeper drop to 101.1 in May.

The crown was trapped in a narrow band near the 28.20 per euro level on Tuesday, with markets unwilling to take any new open postions ahead of parliamentary election late this week.