Treasury - Daily Forex for day 14.06.2006

The U.S. dollar climbed to seven-week highs versus the euro and yen on Tuesday, helped by higher-than-expected core U.S. producer price data. The core producer price index, which excludes food and energy prices, rose 0.3% in May, above market forecasts for a 0.2% increase. The data boosted expectations that the Federal Reserve would raise interest rates at its June 28-29 meeting. Market participants are now turning their attention to May U.S. consumer inflation due out this afternoon.

The crown continued to fall against the euro in early trade on Tuesday on the back of global emerging market sell-off, which also considerably hit Czech equities. Unlike neighbouring currencies, the crown's losses were limited thanks to the excellent economic performance. Today, the May producer price report showed the monthly PPI was up 0.3%, slightly above expectations of a 0.2% rise. On a yoy basis, the index sped up to 1.5% last month from 0.5% in April. The crown shrugged off the report.