At the New York opening the dollar has held its gains against the euro and has remained steady vs. the yen. The focus of the market is the euro/yen cross, which trades very close to its all-time lows.

The final revision of fourth-quarter 1999 U.S.

gross domestic product showed an annual rate of 7.3%. This strong growth was somewhat in excess of market expectations.

After the erratic performance of the Swiss franc over the past week, the unit has stabilized at SF1.6710. Overall the SF has made no net move but has provided a very treacherous trading environment. Hedge fund positioning is seen as the background to these gyrations.

The market continues to await final news on production increases to come out of the


meetings in Vienna. An output increase of 1.5 million to 1.7 million barrels per day is anticipated.

Dollar/yen is opening at 105.10 after moving modestly lower overnight. Traders do not expect a continuing move in this relationship before the release of the

Bank of Japan's

business survey on Monday.

The euro remains under constant pressure and has eased below its New York closing levels at $0.9515. Speaking in Tokyo,

New York Fed


William McDonough

, vice chairman of the

Fed's policy committee, said that Japan was looking at an "economic miracle" and that sophisticated U.S. investors are "absolutely euphoric" about Japan's prospects. McDonough also indicated that the Fed would keep pushing up U.S. rates until consumer spending slows.

As expected, the

European Central Bank

did not take any action on interest rates at its meeting today. The euro was little changed after this announcement. ECB President

Wim Duisenberg

said, "Foreign exchange developments need to be carefully monitored. The present level of the euro, in the mind of the council, does not reflect the recent improvements in the economic outlook for the euro area."

Tim Fox, analyst at

Standard Chartered Bank

in New York, sees the euro as "soggy" and said, "Comments by Duisenberg talking up the euro economy are not the main point. Everybody expects the European economy to improve but it can't match the U.S." He does not see the political will in Europe to make fundamental changes.

Euro/yen is the focus of the forex market's attention. After seeing new lows yesterday, the rate has remained soft overnight in a 1-yen range and is currently just above 100.

Sterling has edged lower against the dollar and is presently trading at $1.5910. Euro/sterling is at 59.80 pence just above yesterday's all-time record low.

The Australian dollar is little changed at $0.6100. The U.S. dollar is steady against the Canadian dollar and is holding at C$1.4585. Current levels are seen as a key chart point which could indicate the next move.

Forex action continues to demonstrate the sensitivity of the market. Trading is dominated by short term speculative players who look for quick opportunities. Sentiment is now somewhat less positive about the dollar's potential appreciation against the yen. The possibility of central bank intervention to buy dollar/yen cannot be ruled out as a factor.

Again today, it is clear that traders are profoundly negative toward the euro and the predictable decision by the ECB to leave rates unchanged obviously does nothing to affect that view. While the ECB is not happy with the weakness of its currency, there is little that the bank can do to seriously influence the level of the euro.