Treasury - Daily Forex for day 11.01.2007

The dollar strenghtened across the board on Wednesday after a report showing the U.S. trade deficit shrank surprisingly in November, for the third consecutive month. The gap narrowed to $58.23 billion, its smallest since July 2005, from $58.87 billion in the previous month. Analysts had expected a shortfall of $59.90 billion. Today, the European Central Bank is broadly expected to hold interest rates unchanged at its policy meeting but will most likely signal a rate rise to take place by the end of the first quarter.

The crown fell to near one-month low against the euro earlier on Wednesday, undermined by worsened sentiment towards emerging markets and newspaper remarks from CNB Vice-Governor Miroslav Singer that he could "seriously consider" cutting interest rates due to the strength of the crown. Later in the session, however, the crown firmed back to an opening level.