Yesterday it began to look as though the euro might hold on to recent gains. It maintained a more positive tone overnight, moving another half-percent higher at $0.8860.

Currency markets are unlikely to pay too much attention to today's U.S.

durable goods orders

(

definition |

chart |

source

) for August, which rose 2.9% after a 13.1% fall in July.

With only 24 hours to go, the outcome of Denmark's Thursday vote on joining the eurozone remains unclear. Today, one poll showed europhiles prevailing by a 2% margin. Another suggested that europhobes have a 4% lead. (

TheStreet.com

has written a story about the upcoming

Danish vote.)

"At the moment the cop-out phrase 'too close to call' comes to mind," says Malcolm Barr of

Chase

. "The polls suggest that the 'no' vote has a slight lead, but the drift is to the 'yes' camp," he adds.

The forex market is constrained by concerns that the

European Central Bank

will undertake a further round of intervention ahead of the Danish vote, just as it engineered last week's surprise intervention the day before the

G7

meetings. This factor should keep the euro fairly well supported during the day.

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"It's become well established in the market that a 'yes' is positive for the euro and a 'no' is negative," comments Barr. He believes that if the europhiles prevail in Denmark, the impact on the currency could be "one big figure." This indicates a gain of about 1%.

In the wake of last week's intervention, and with further intervention possible, talking up the euro is definitely more effective now. In a magazine interview today,

Bundesbank

President

Ernst Welteke

made sure his comments carried the maximum threat. "The war chest of European central banks is well filled," he said, adding that he is "certain that the euro's weakness will not continue."

Other European leaders made similar remarks, including ECB Vice-President

Christian Noyer

and former German Chancellor

Helmut Kohl

.

Dollar/yen has edged fractionally higher, to open at 107.75. As in Tuesday's trading, a weaker yen and firmer euro has pushed the euro/yen cross significantly higher. At the open in New York, euro/yen is up a further three-quarters of a percent, at 95.45 yen -- a gain of more than 5% since last week's lows.

The yen's weakness continues to be driven by poor economic growth and, in particular, few signs of a pick-up in consumer demand. This problem was exacerbated by the announcement that Japanese retail sales for August were 1.3% lower than year-ago levels, the 41st successive month of decline.

Sterling is higher at $1.4650, with the euro firmer vs. the pound, at 60.40. The U.K.'s

GDP

was unchanged in the second quarter, with the annual growth rate slightly higher at 3.2%.

The euro's gains are helping the Swiss franc. Dollar/Swiss franc is trading at SF1.7220, 50 basis points lower than yesterday's closing level. The euro is slightly stronger vs. the Swiss franc at SF1.5245.

The Canadian dollar is little changed at C$1.4880.

The Australian dollar stayed in a narrow range overnight and is largely tracking the euro's moves. This morning the Aussie is opening around $0.5490. The New Zealand dollar is little changed at $0.4140.

The South African rand is relatively firm this morning at 7.19/dollar, supported by the euro's gains. The rand has recovered sharply from last week's all-time low of 7.38 and is expected to make further gains in the near term.