Treasury - Daily Forex for day 05.10.2006

The dollar edged higher against the euro yesterday, shrugging off steeper-than-expected decline in U.S. service sector activity and instead focusing on a continued drop in oil and commodity prices. Crude oil prices have so far slumped 25% from all-time highs hit in July, falling to 7-month lows below $ 58 per barrel on Wednesday. The Institute for Supply Management's non-manufacturing index tumbled to 52.9 in September from 57.0 in August and well below forecast for a 56.0 reading. The dollar got rid of some gains later after Federal Reserve's Chairman Ben Bernanke said the U.S. housing market is now experiencing a substantial correction.

The Czech crown ended Wednesday's session almost flat versus the euro, lagging the firming trend in the neighbouring central European currency markets as the rightist minority government of PM Mirek Topolanek lost a parliamentary confidence vote a day before.