Treasury - Daily Forex for day 26.03.2006

The U.S. dollar was barely changed against the euro yesterday, with the market lacking any fresh impetus due to the absence of economic data releases. The euro/dollar rate moved below $1.21, roughly one cent below seven-week highs hit late last week. Earlier this week, the market shifted back toward the view that the U.S. Federal Reserve will continue to raise interest rates to at least 5% in this tightening cycle following February's strong core producer price data on Tuesday and hawkish remarks from Fed Chairman Ben Bernanke on Monday. Market participants start focusing on next week's Fed policy meeting, which is widely expected to bring the key U.S. rate to 4.75% from current 4.5%.

The Czech crown shadowed regional trend on Wednesday, ending the session slightly weaker against the euro. No economic reports are due these days.