The forex markets remained quiet over the weekend.


European Finance Ministers

meeting in Lisbon has not had any impact on markets. Attention is now focused on the


summit this weekend. The U.S. employment data for March came in as expected last week and had little impact on the dollar with traders satisfied that no new impetus has been generated.

At the opening in New York, the euro is a little firmer at $0.9595 compared with the close of $0.9545. The market is expected to look closely at the U.S. stock indices for direction.

Dollar/yen has firmed as a number of comments from the

Bank of Japan

(BOJ) have indicated that its plan to keep the yen soft is still in place. The dollar is trading at 106.50, up over one yen from Friday's close at 105.40. The BOJ announced that its Policy Board voted to maintain its 14 month old zero interest rate policy. This strategy is designed to pull the economy out of its current recessionary conditions and to minimize the strength of the yen.

"Dollar/yen is a little firmer but this is just a function of the G7 meeting at the weekend," said Jane Foley of

Barclays Capital

in London. She does not see the move as important and feels that holding the,"107.50 level would be of real significance but this is still out of range."

Traders are concerned that the G7 may try to support the BOJ's desire to keep the yen from pushing higher but this is not expected to be a key focus. Japan's vice minister for finance,

Nobuaki Usui

said that he does not expect any significant change in the G7 position on currency relationships at the meeting on April 14.

Sterling has again remained flat and is largely unchanged over the past worldwide sessions at $1.5820. U.K. output prices for March rose a faster- than-expected 0.5%. Prices paid for raw materials by British companies rose 0.8% for a year-on-year rise of 13.8%.

The dollar/Swiss franc relationship showed some volatility on Friday but has steadied over the weekend and is opening at SF 1.6380. Euro/swiss has firmed to SF 1.5725. The Swiss franc is likely to be supported by the view that the

Swiss National Bank

is happy to see its currency appreciate.

The dollar is a little changed at C$1.4570 with these two currencies still in a narrow band. There is little reason to anticipate any major moves in this relationship in the immediate future.

The Australian dollar has edged back down to recent 18 month lows at $0.5960 during trading in Asian markets. Traders believe that the Aussie is vulnerable and exposed to further losses in the near term.

The $A was not helped by comments printed in the

Australian Financial Review

suggesting that


was predicting further weakness for the currency. There is also the opinion that the recent statement by the

Reserve Bank of Australia

drew the market's attention to possible pressures on the $A and so attracted selling. Foley at Barclays sees the $A as, "very vulnerable and has got further to go before its finished. Its been a sell for a fair amount of time."