Treasury - Daily Forex for day 01.05.2004

...forecast had been for a 5.0% growth but many had been expecting even a stronger report. However, inflation surprised on the upside, up 2% from previous 1.2%. The GDP report overshadowed better-than-expected jobless claims data for the week ended April 24. New claims for benefits declined to 338,000, while analysts had forecast a drop to 345,000.

The crown markedly appreciated versus the euro yesterday after the central bank said it raised its inflation forecast and suggested the interest rate hike might come sooner than previously thought. The bank also significantly raised its GDP growth outlook for this year, forecasting 3.8-4.2% expansion. In January it had predicted a 2.9-3.4% growth in 2004 GDP.