Treasury - Daily Forex for day 01.11.2006

The dollar slumped to one-month lows against a basket of major currencies yesterday, undermined by weaker-than-expected U.S. consumer confidence and business activity reports. The Conference Board reported that the consumer sentiment index dropped to 105.4 in October from September's 105.9, while analysts had forecast the index to climb to 108.0. Another report showed that Chicago Purchasing Managers' Index, which measures business activity in the Midwest, fell to the lowest level since August 2005. However, the key report of this week will be U.S. nonfarm payrolls data due on Friday.

The Czech crown soared to a three-month peak of 28.08 per euro on Tuesday, mirroring the firming trend in the whole region driven by a large corporate deal going through the market. The crown's rise has raised the probability that the CNB will keep interest rates flat in the months ahead.