After Friday's coordinated intervention to prop it up, the euro is opening unchanged from last week's closing levels.


European Central Bank'

effort along with the United States and Japan to end the 21-month decline, is delicately poised. The single currency rallied 5% after the intervention on Friday, but, by this morning, 40% of that initial boost had slipped away. The euro is opening at $0.8765 in New York

For the time being, the euro will not be sold aggressively because traders are sure the central banks will come back into the market if any selling pressure reemerges to drive the value back down. But there is still no real interest in moving into the single currency on a longer term basis, so the likelihood remains that downward pressure will begin to appear over coming days.

"You would expect to see them in repeatedly over the next few weeks or the market will start to push the euro lower," said Mark Henry of

GNI Financial

in London.

A number of spokesmen have commented on the euro's moves and the foreign exchange market's reaction. The Prime Minister of Luxemburg,

Jean-Claude Juncker

, implied that further help for the euro was quite likely. "Markets must know the Europeans will not allow them to ignore the fundamentals. It's a firm message that we want a strong euro," he said in a media interview today.

The fear of a deteriorating euro causing inflation was clearly a factor in the decision to intervene in the forex market. Further evidence that prices in the euro zone have been picking up was given today by the German

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Consumer Price Index

data for September. Driven by higher oil prices, inflation rose 0.4% month-on-month, 2.4% year-on-year. This latest data suggests that euro zone inflation will remain well above the 2% target rate in the coming months.

The next major concern for the euro is the outcome of Thursday's vote in Denmark on whether or not to become a member of the euro zone. A "no" vote would hurt the single currency by indicating that public opinion is no longer supportive of the expansion of the euro zone. Two polls released today suggest that the "no" group is leading the "yes" side by about 3 percentage points. "People have their eye on the Danish referendum, and the market has already priced in a 'no' vote," Henry said. " The Danish vote could be just another piece of bad news."

Elsewhere the forex markets are more or less holding levels seen at the close of last week.

The yen traded in a narrow range and is opening at 107.65, slightly stronger than Friday's close at 108.00. After rallying by about 3.5% on Friday, the euro/yen cross-rate slipped 0.5% to open at 94.40.

Sterling also backed off from Friday's highs and is opening at $1.4540. The euro has remained steady against the pound, at 60.20. Sterling continues to benefit from incoming mergers and acquisition flows, as a German utility company confirmed that it will buy the

Thames Water Company

for 4.3 billion pounds. The pound was unaffected by the latest U.K. trade gap, a record at 3.0 billion pounds in July, up from 2.4 billion in June, as it was seen as a product of a strong economy.

The Swiss franc eased and is opening at 1.7375, as the market tentatively returns to buying dollars and selling European currencies. The euro is slightly firmer against the Swissy, at 1.5225.

The Canadian dollar is unchanged against the U.S. dollar at C$1.4885.

The Australian dollar is holding Friday's better levels at $0.5450, but shows no real signs of building a base for a long term move up. The New Zealand dollar is steady around $0.4120.

As the market anticipates additional privatization inflows, t he Polish zloty is firmer at 4.55/dollar.

In Indonesia, the rupiah is softening. Local banks need dollars for debt interest payments. The rupiah is now at 8.835, and traders expect further weakness.