As anticipated Friday, the rapid rally in the Swiss franc has not been maintained over the weekend. In the past few days, dollar/Swiss saw levels of SF1.6255, a loss of five "big figures" since trading at SF1.6760 before Thursday's interest-rate change in Switzerland. Currently, the dollar was trading at SF1.6340, a recovery of 1% from its lows. The weakness of the SF has also caused the euro to ease.
Overall, the dollar was little changed in European and Asian trading and is opening in New York near Friday's closing levels. No substantial news has come out of the
meetings in Vienna, although possible output changes may be announced. The election of
as president of Russia has had no effect on the foreign-exchange markets. Dollar/yen was lately at 106.70 after trading in a narrow range overnight.
The euro remains subdued and has eased into the lower end of its European trading range at around $0.9725 after failing to break above 98 cents in earlier activity. Comments by the
Commissioner for Monetary Affairs Pedro Solbes that "Europe's growth outlook is high, probably higher than we previously foresaw" were not given great weight by traders. In Monday trading, euro/yen has given up some of last week's gains, and the European unit has eased to 103.85 from 104.20 on Friday. The resignation of French Finance Minister Christian Sautter had little effect.
Sterling has maintained its recovery against the dollar and was lately trading at $1.5925. Today's announcement that the U.K.
current account deficit
for the fourth quarter of 1999 was 2.8 billion pounds, down from the previous quarter's level of 3.1 billion, helped to push sterling higher. Euro/sterling was firmer at 61.00. The Australian dollar has strengthened to $0.6130. The dollar was a little weaker against the $C and is now at $C1.4605. Stephen Wateridge of
CIBC World Markets
in Toronto said he sees that the U.S. dollar "could go lower to around $C 1.4590 before continuing its rally to $C 1.48 or $C1.49." He predicted that the
Bank of Canada
could match the next
increase but then possibly not follow any further rises.
The NZ dollar has rallied sharply and now stands at a seven-week high of $0.4970. The NZ was helped by strong economic growth data for the first quarter of the year and by a confirmation of the country's credit rating by
Standard & Poor's
Recent forex activity has supported the market's perception that the dollar has bottomed and may now build a base for a rally. So far, dollar/yen has not yet struggled above 108, and traders look to establish trading above this level. This may not be achieved easily, as the yen could be helped by this week's release of the
Bank of Japan's
quarterly tankan survey of business sentiment.