Treasury - Daily Forex for day 05.08.2006

The euro strengthened against the dollar on Thursday after the European Central Bank raised interest rates, as expected, and signalled that further tightening may be needed. The ECB lifted rates by a quarter percentage point to 3% to face the growing inflation which has held above the bank's 2% limit. Sterling firmed even more against the dollar after the Bank of England surprisingly raised interest rates, putting the main rate to 4.75%.

The crown firmed against the euro yesterday tracking other central European currencies which seemed to benefit from the dollar's fall against the euro after the ECB raised interest rates.