Treasury - Daily Forex for day 28.07.2006

The dollar firmed slightly versus the euro yesterday driven primarily by technical factors. The market shrugged off U.S. data showing a surprisingly strong rise in June durable goods orders and a fall in weekly jobless claims. Market participants will focus on U.S. GDP growth data for the second quarter due to be released this afternoon.

The crown was little changed on Thursday after the Czech National Bank raised interest rates by 25 basis points, as expected, lifting the key two-week repo rate to 2.25%. However, the bank's board proved split, with the voting result being 4:3 in favour of the hike. Three members voted for steady rates. The CNB also slightly upgraded its forecast for this year's GDP growth to 6.0-7.2% from previous 5.4-6.9%. The new inflation outlook sees yoy CPI between 2.8-4.2% in June 2007 and 3.3-4.7% in December 2007.