Currencies: Forex Trading Whisper-Thin on European Holiday - TheStreet

The forex market has remained calm since Friday's close with no trend apparent. Today, markets in the euro zone are closed for the Pentecost holiday and London traders have not been inclined to push in any new direction.

This week is likely to see forex markets focus on U.S. data, particularly

retail sales,

consumer prices and

industrial production. There is very little new information expected from the euro zone. "Nothing happens until later in the week," said Rob Haywood of

Bank of America

in London. "The dollar will be driven by news out of the U.S.," he said.

The yen opened at 106.60, virtually unchanged from Friday's close of 106.90. Euro/yen was slightly weaker at 101.65.

The yen was unaffected by a statement from the

Bank of Japan

that it did not plan to change its "zero-interest-rate policy" in the immediate future. The BOJ also expects further good

GDP

data for the current quarter. "Following strong growth in the January-March quarter, we expect April-June GDP to rise considerably," said Economic Planning Minister

Taichi Sakaiya

.

The euro has given back a few ticks, at $0.9525.

It is clear that the major issue around the euro continues to be the market's interpretation of last week's 50-basis-point rate increase. "Some feel the rate hike will derail the European economy while others feel that it shows the ability to take decisive action," said Haywood.

Sterling was trading firmer and opened at $1.5115. Euro/sterling is also lower at 63.05 pence.

There are some signs of a split in the U.K. government over the strength of its commitment to joining the euro zone. "The only sensible thing to do is to prepare, so we can join if we choose to do so," said Labor party minister

Margaret Becket

.

Dollar/Swiss franc was relatively flat, at 1.6390. The euro/Swiss franc cross was steady at 1.5620.

The Canadian dollar has held slightly better levels but has been unable to follow through. Even repeated items of positive economic data have not been able to push the U.S. dollar down below this morning's opening at $C1.4750.

The Australian dollar is looking modestly stronger and touching the 59-cent level overnight before opening at $0.5895. Traders await first-quarter

GDP

data on Wednesday to give the currency a further boost.

The New Zealand dollar was little changed at $0.4690.

The South African rand dropped Friday's gains and opened in New York at 7.03.

The Mexican peso remains soft at 9.88. The governor of the Mexican

Central Bank

Guillermo Ortiz has indicated that he stands ready to tighten monetary policy in the event of any confusion around the July 2 elections.